WAGE AND HOUR DIVISION

UNITED STATES DEPARTMENT OF LABOR

Fact Sheet #15A: Tipped Employees under the Fair Labor Standards Act (FLSA) and Dual Jobs

This Fact Sheet provides information concerning the application of the FLSA to tipped employees who perform dual jobs for the same employer.  When a worker is employed by one employer in both a tipped and a non-tipped occupation, the employee is performing dual jobs.  For example, an employee employed both as a maintenance person and a server is performing dual jobs. 

For more information regarding the federal minimum wage and tip credit provisions of the FLSA, see Fact Sheet #15: Tipped Employees Under the FLSA.

 

When can an employer claim a tip credit toward its minimum wage obligation?

An employer can take a tip credit towards its minimum wage obligation only when an employee is engaged in a tipped occupation by performing work that is part of their tipped occupation.

An employee performs work that is part of their tipped occupation when either:

1. The employee performs work that is tip-producing.  Tip-producing work is any work performed by a tipped employee that provides service to customers for which the tipped employee receives tips, or
2. The employee performs work that directly supports the tip-producing work, if it is done only for a limited time.  This directly supporting work is work performed by a tipped employee in preparation of or to otherwise assist tip-producing customer service work. 

 

Tip Producing Work

Examples of tip-producing work include, but are not limited to, a server waiting tables; a bartender making and serving drinks and talking to customers, and a nail technician performing manicures.  In each of these cases, the service is provided to the customer who is the source of the tip.
 

Work Directly Supporting Tip Producing Work

Examples of a server’s directly supporting work, are when the work is performed in preparation for or to otherwise assist tip-producing customer service work, and when it does not provide service to customers.  This work includes, but is not limited to, dining room prep work, such as refilling salt and pepper shakers and ketchup bottles, rolling silverware, folding napkins, and setting tables.

 

The tip credit may be claimed for a limited amount of directly supporting work

An employer may claim a tip credit toward its minimum wage obligation for any time a tipped employee spends performing tip-producing work.  An employer may also take a tip credit for the time a tipped employee spends performing work that directly supports tip-producing work, provided the employee does not perform directly supporting work for a substantial amount of time.  

A tipped employee performs directly supporting work for a substantial amount of time if:

1. the tipped employee performs directly supporting work for more than 20 percent of the hours in a workweek for which the employer has taken a tip credit.  An employer may not take a tip credit for any time spent in directly supporting work that exceeds this 20 percent tolerance. 

Or

2. the tipped employee performs directly supporting work for a continuous period of time that exceeds 30 minutes.  When an employee performs directly supporting work, the employer may not take a tip credit for any of the time that exceeds 30 minutes.

 

Examples

Example #1: Janet

Janet works as a bartender and works 40 hours a week (eight hours a day, five days a week) at a pub.

Tip-producing work: Janet’s tip-producing work includes making and serving drinks, serving food to customers at the bar, keeping the bar organized as she prepares drinks, and wiping down the surface of the bar where customers are sitting.

Directly supporting work: For 90 minutes after the pub closes each night, Janet slices and pits fruit for drinks for the next day’s service, wipes down the bar and tables in the bar area, cleans bar glasses, arranges bottles in the bar, retrieves liquor and supplies, cleans ice coolers and bar mats, makes drink mixes, and vacuums under the tables in the bar area.

Question: When can Janet’s employer take a credit for the tips that Janet receives against the payment of the full minimum wage and when must the employer pay a direct cash wage at least equal to the full minimum wage?

Answer:

Once Janet performs more than 30 continuous minutes of non-tipped directly supporting work, she is no longer engaged in her tipped occupation.  Her employer must pay her a direct cash wage equal to at least the minimum wage for the time over 30 minutes when she performs non-tipped directly supporting work; therefore, Janet must be paid the full minimum wage for one hour per day, five hours total per work week.  Janet’s employer can take a tip credit for the remaining 35 hours of her 40-hour workweek, because she performs only tip-producing work and a non-substantial amount of directly supporting work during those hours.  Janet’s non-tipped directly supporting work is not considered substantial because it does not exceed 30 minutes of continuous work or 20 percent (20% of 35 hours = 7 hours) of that part of the workweek in which Janet is engaged in a tipped occupation.

 

Example #2: Miguel

Miguel works as a server and works 30 hours a week (five hours a day, six days a week) at a restaurant.

Tip-producing work: Miguel’s tip-producing work includes taking orders, making menu recommendations, serving food and drinks, attending to customer spills, processing credit card and cash payments, and removing items on the table during the meal service.

Directly supporting work: Miguel also refills salt and pepper shakers and condiment bottles, rolls silverware, folds napkins, and vacuums under tables in the dining area.  Miguel performs these tasks for 30 minutes before and after his server shift, and also for no more than 30 continuous minutes during lulls in the table service, totaling nine hours per week.

Question: When can Miguel’s employer take a credit for the tips that Miguel receives against the payment of the full minimum wage and when must the employer pay a direct cash wage at least equal to the full minimum wage?

Answer:

Since Miguel performs directly supporting work for nine hours per week, which is more than 20 percent (20% of 30 hours = 6 hours) of that part of the workweek in which Miguel is engaged in a tipped occupation, his employer must pay him a direct cash wage equal to at least the minimum wage for three hours of directly supporting work.  Miguel’s employer can take a tip credit for 27 hours of Miguel’s 30-hour workweek.

For more examples, please see Tips Dual Jobs: Definitions and Examples.

 

Work that is not part of the tipped occupation

Work that is not part of the tipped occupation is any work that does not provide service to customers for which tipped employees receive tips and does not directly support tip-producing work.  If a tipped employee is required to perform work that is not part of the employee’s tipped occupation, the employer may not take a tip credit for that time.  Cleaning the restaurant kitchen and bathrooms, for example, is work that is not part of the tipped occupation of a server; the employer must pay at least the full minimum wage per hour and cannot take a tip credit for the time the employee cleans the kitchen or bathrooms.