The plethora of litigation against restaurants for alleged improper tip practices continues. Follow this link to see new litigation brought against a restaurant for requiring tipped employees to perform non-tipped work.
If a restaurant takes a tip credit, those employees who are paid pursuant to the tip credit cannot perform non-tipped work more than 20% of the time. (The DOL has indicated that an employee’s status will be viewed on the basis of his activities over an entire workweek. See DOL Opinion Letter, 1997 WL 998047 (Nov. 4, 1997).) In other words, if a tipped employee is performing related duties not directed at tips, then the related duties can be compensated pursuant to the tip credit as long as those related duties only comprise 20% or less of the employee’s time. No tip credit may be taken for time spent on unrelated duties, and a tipped employee must be paid full minimum wage for such duties.
For example, a waitress may be employed in a dual job. If she customarily and regularly receives at least $30 a month in tips for her work as a waitress, then she is a tipped employee only with respect to employment as a waitress. While a tip credit can be taken for the time worked in the tipped position, she must be paid at least minimum wage for those hours spent working in the non-tipped position. Such a situation is distinguishable from that of a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses. These are considered related duties in an occupation that is a tipped occupation even though they are not by themselves directed toward producing tips.
You can find helpful guidance on assessing and using tip credit here.