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On October 29, 2021, the U.S. Department of Labor (DOL) issued its final rule, restoring a modified version of the "80-20" method, which was previously used to determine when employers can spend time for employees who receive tips Obtain tip credits for duties related to tipping occupations (ie, only if the time does not exceed 20% of the employee's weekly work).

In 2018, DOL cancelled its long-standing 80-20 guidelines, and later released new guidelines that allow employers to receive tip credits when tipping employees perform related, non-tip responsibilities, as long as these jobs are relevant or reasonable. The time immediately before or after the tipping tariff.

The final rule officially abandoned this method, representing the second pivot of the problem that employers of tipping employees had to make in just a few years.

As with the proposed rules outlined in our previous alert, the final rule states that "employees are engaged in tipping occupations"-so employers may receive tipping credits-when employees are engaged in "tip-generating work" or "direct support The work of cutting-edge production work, if the direct support work has not been carried out for a considerable period of time. "

However, in its final rule, DOL revised the definition of the proposed rule to clarify that “tip-producing work” is “any work performed by the tipped employee to provide services to the customer while the tipped employee performs”, including “all Aspects of work". Tipping employees receive customer service for tips. "Direct support work" is "work performed by the tipped employee to prepare or otherwise assist in the provision of tipped customer service work."

The final rule also states that if the time exceeds (1) 20% of the employee’s weekly working hours or (2) 30 minutes of continuous work, the employer shall not charge a tip for the time spent directly supporting the work.

This is different from the proposed rule, which states that if an employee continuously spends 30 minutes or more (not even the first 30 minutes) performing direct support work, the employer cannot obtain tip credit for any time the employee spends.

According to the final rule, the employer cannot only engage in direct support work for more than 30 minutes and any direct support work time exceeding 20% ​​of the working week (excluding any time when the employer does not charge tips). As long as the time does not exceed the 20% tolerance, the employer will be able to apply for tip credit within the first 30 minutes. The employer will exclude any continuous time of direct support work that exceeds 30 minutes from the calculation of the 20% tolerance.

According to the Department of Labor, since it has clarified the definitions of tipping work and direct support work in its final rules, it is "easier to distinguish" these types of work, and "it is easier for employers to track [direct support work] included in the 20% and Within the 30-minute limit."

The final rule is scheduled to take effect on December 28, 2021.

Prompt production work and direct support work

According to the final rule, whether a task is tipped work or directly provides support depends on whether the employee performs it as part of the customer service for tipping the employee.

Therefore, according to DOL, employers “may understand that some tasks that are'direct support' tasks-included in the time limit-are tip-generating tasks, and when tipped employees perform tasks to serve their own customers-rather than counting Entry time limit."

DOL provides the following examples:

Tip-making work that is not counted in the time limit includes the work of bartenders wiping the bar counter and table surfaces in the customer’s seating area during the process of providing tip-making services to customers, and cleaning the bar glasses used to make drinks for these customers And tools.

However, if the bartender performs these same tasks before or after the restaurant opens, these same tasks will directly support the work and count towards the time limit, because they are not performed as part of the service, and tipping employees are tipped.

The proposed rule defines "tip-producing work" as "any work for which the tipped employee accepts the tip". The final rule modified the proposed rule, "to clarify that customer service is a necessary prerequisite for tipping employees to receive tips."

Therefore, according to the final rule, “tip-generating work” refers to “any work performed by tipping employees who provide services to customers while tipping employees do”, including “all aspects of services provided to customers, and tipping Employees receive tips."

The final rule and its preamble provide several non-exhaustive examples of tip production activities in different occupations:

The proposed rules define “direct support work” as work that is part of the tipping profession (ie, “work to help tip employees complete the work for which they are tipped”), provided that the work is not performed for “substantial work” . How much time. "

The final rule modifies the proposed rule to explain that direct support work includes "work performed by a tipped employee in preparation for or otherwise assisting in customer service work that generates tips."

Therefore, according to the final rule, direct support work includes “work performed by tipping employees (such as restaurant waiters or bus clerk) before or after table service, such as rolling silverware, setting tables, and placing goods for bus stops. This is Work done." Customer service work for preparing tips. "

The final rule contains the following additional, non-exhaustive examples that directly support jobs in various occupations:

What does this mean for employers

The end of this year-especially on December 28, 2021, will be one of the biggest nights of the year in restaurants and bars: New Year's Eve-will mark the official return of DOL to the 80-20 rule to determine when employers can Provide tip credits for the minimum wage to tipping employees. Although DOL made changes to its proposed rules, the final rule will be an administrative burden for employers because it requires close monitoring of the time employees spend on “direct support” activities.

Employers applying for tip credits for tipping employees should work closely with legal counsel to evaluate their current wage payment and record keeping practices, and adjust the job responsibilities and responsibilities of tipping employees if necessary to comply with the final rules.

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