DOL provides more guidance on tipped “dual job” employees
Posted February 22, 2019
In a 2/15/19 Field Assistance Bulletin, the U.S. Department of Labor’s Wage and Hour Division (WHD) again indicated that it will no longer prohibit an employer from taking a tip credit based on the amount of time an employee spends performing duties related to a tip-producing occupation that are performed contemporaneously with direct customer-service duties or for a reasonable time immediately before or after performing such direct-service duties.
Employers are still prohibited from keeping tips received by their employees, regardless of whether the employer takes a tip credit under the Fair Labor Standards Act. Employers electing to use the tip credit provision must also ensure tipped employees receive at least the minimum wage when direct (or cash) wages and the tip credit amount are combined. If not, the employer must continue to make up the difference.
Employers may pay a tipped employee a lower direct cash wage and count a limited amount of the employee’s tips as a partial credit to satisfy the difference between the direct cash wage and the federal minimum wage (known as a “tip credit”).
When an employee in both a tipped and non-tipped occupation, the tip credit is available only for the hours the employee works in the tipped occupation. In this dual job scenario, the employer may take a tip credit for the time that the tipped employee spends performing duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips. For example, a server who also cleans and sets tables, makes coffee, and occasionally washes dishes or glasses is engaged in duties related to a tipped occupation, even though the server is not tipped for these related duties.
The following principles are used to determine whether a tipped employee’s non-tipped duties are related to the tipped occupation:
- Non-tipped duties listed as examples in 29 CFR § 531.56(e), and non-tipped duties listed as core or supplemental for the appropriate tip-producing occupation in the Tasks section of the Details report in the Occupational Information Network (O*NET) are related duties.
- An employer may take a tip credit for any amount of time that an employee spends on related, non-tipped duties performed contemporaneously with the tipped duties — or for a reasonable time immediately before or after performing the tipped duties — regardless whether those duties involve direct customer service.
- Employers may not take a tip credit for time spent performing any tasks that are not contained in the regulatory examples, or in the O*NET task list for the employee’s tipped occupation. Some of the time, however, that a tipped employee spends performing these tasks — which are unrelated to the employee’s tipped occupation — may be seen as de minimis.
This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.
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