Navigating the FLSA is no easy task when dealing with tipped employees. Under 29 CFR 531.56(e), employers are allowed to take a “tip credit” for their tipped employees in order to meet the federally-required minimum wage, but questions arise when these tipped employees perform customer-service duties at the same time as their tip-producing duties. Can the employer take a tip credit only for the time spent performing tip-producing duties? How much customer-service work can be performed before the tip credit cannot be claimed?
The Wage and Hour Division attempted to clear up confusion on whether the tip credit can be taken through a revision of its handbook, specifically section 30d00. Now, as long as an employee “customarily and regularly receives more than $30.00 a month in tips” and follows the rest of the rules regarding tip credits, the employer does not need to distinguish between time spent on related, non-tipped duties performed at the same time, or immediately before and after performing tipped duties. This could include vacuuming, cashier work, and janitorial or maintenance work performed contemporaneously with duties typically performed by tipped employees.
Of course there are other issues to take into consideration when determining how much to pay your tipped employees (proving the amount of tips received by tipped employees, state minimum wages, deductions, service charges, and tip pooling, to name a few). But as long as the employee is working in a customarily tipped position and earning more than $30 a month in tips (an incredibly low number in today’s service industry), employers need no longer be concerned about those ancillary duties performed by tipped employees in furtherance of the employer’s business.
If you need any assistance in determining the correct wages for your service industry employees, contact the attorneys at the Wiley Law Office, PC, for advice that works.