DOL confirms that employers may claim tip credit even for time tipped employees spend on non-tipped work

Confirming an approach announced in a recent opinion letter, the DOL has amended its Field Handbook, the manual for its enforcement personnel, that employers (like restaurants) may claim a tip credit for time that tipped employees spend on non-tipped work (such as a waiter who may vacuum) if performed contemporaneously (or nearly so) with tipped customer 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.

As explained in two recent blog posts, this lifts the DOL’s Obama-era 80-20 rule for tipped employees.

Source: DOL Field Assistance Bulletin 2019-2 (2/15/19).