The U.S. Department of Labor recently retracted its guidance on the “80/20” rule which prevented employers from applying the tip credit when tipped employees spend more than 20 percent of their working time performing non-tipped work.
The opinion letters released on November 8, 2018 address whether and when employers may take a tip credit for employees who work in dual jobs, such as a waiter and a maintenance worker. The recent guidance explains that the 80/20 rule should not be interpreted to prohibit employers from taking the tip credit for duties considered directly related to the tip-producing occupation, given that all other requirements of the Fair Labor Standards Act (FLSA) necessary for an employer to take a tip credit are met. A duty is considered directly related to tip-producing occupations if it is listed as a core or supplemental duty and performed with direct service duties. Duties considered directly related to a tip-producing occupation and, thus, do not impact whether the 80/20 Rule is violated are the following:
§ Take orders from patrons for food or beverages.
§ Check with customers to ensure that they are enjoying their meals and take action to correct any problems.
§ Check patrons’ identification to ensure that they meet minimum age requirements for consumption of alcoholic beverages.
§ Collect payments from customers.
§ Write patrons’ food orders on order slips, memorize orders, or enter orders into computers for transmittal to kitchen staff.
§ Prepare checks that itemize and total meal costs and sales taxes.
§ Present menus to patrons and answer questions about menu items, making recommendations upon request.
§ Remove dishes and glasses from tables or counters and take them to kitchen for cleaning.
§ Serve food or beverages to patrons, and prepare or serve specialty dishes at tables as required.
§ Clean tables or counters after patrons have finished dining.
§ Prepare tables for meals, including setting up items such as linens, silverware, and glassware.
§ Explain how various menu items are prepared, describing ingredients and cooking methods.
§ Assist host or hostess by answering phones to take reservations or to-go orders, and by greeting, seating, and thanking guests.
§ Escort customers to their tables.
§ Perform cleaning duties, such as sweeping and mopping floors, vacuuming carpet, tidying up server station, taking out trash, or checking and cleaning bathroom.
§ Inform customers of daily specials.
§ Prepare hot, cold, and mixed drinks for patrons, and chill bottles of wine.
§ Roll silverware, set up food stations, or set up dining areas to prepare for the next shift or for large parties.
§ Stock service areas with supplies such as coffee, food, tableware, and linens.
§ Bring wine selections to tables with appropriate glasses, and pour the wines for customers.
§ Fill salt, pepper, sugar, cream, condiment, and napkin containers.
§ Describe and recommend wines to customers.
§ Perform food preparation duties such as preparing salads, appetizers, and cold dishes, portioning desserts, and brewing coffee.
§ Provide guests with information about local areas, including giving directions.
§ Garnish and decorate dishes in preparation for serving.
The Department of Labor explains that the 80/20 rule “attempts to ensure that employers do not evade the minimum wage requires of the Act simply by having tipped employees perform a myriad of non tipped work that would otherwise be done by non-tipped employees.” Accordingly, the Department of Labor maintains the“dual jobs” distinction employers may not take a tip credit for time spent performing any tasks not contained on the list unless the time spent on the tasks is de minimis.
