For the last decade, one of the most difficult things for a restaurant owner to keep track of was calculating the amount of time servers spent doing side work. A labor rule that dates back to 2009 mandated that employers had to pay servers at least the federal minimum wage for non-tipped work duties—if that work exceeded 20 percent of their overall shift.
If you own a restaurant, the onerous, burdensome, and perhaps downright impossible task of keeping tabs on employee side work time is over … at least for now.
The U.S. Department of Labor, in November, 2018, officially ended the Obama-era “dual jobs” interpretation, which separated tipped and non-tipped duties. And, now, it’s official, as the Department of Labor has revised its Field Operations Handbook.
On February 15, 2019, the Department of Labor’s Wage and Hour Division, issued a Field Assistance Bulletin (No. 2019-2), which says:
“[Wage and Hours Division] will no longer prohibit an employer from taking a tip credit based on the amount of time an employee spends performing duties related to a tip-producing occupation that are performed contemporaneously with direct customer- service duties or for a reasonable time immediately before or after performing such direct-service duties.”
If you’re a restaurant owner, this implies you no longer have to pay a server for two different jobs. Ostensibly, the Field Assistance Bulletin suggests that tip credits, which allow employers to pay tipped employees less than the minimum wage as long as tips bring their earnings up to the minimum wage, can now be applied.
However, keep a few things in mind before you celebrate the official Dep’t of Labor ruling.
First, it’s possible that as early as January, 2021, if there’s a new administration, the Department of Labor, under new leadership, could revise the policy, possibly even reverting it back to the old regulations.
Second, some states, instead of enacting federal minimum wages and labor laws, have established their own minimum wages, as well as enacted labor laws that are stricter than the federal level.
But a little rejoicing is in order, as you no longer have the burden of gauging exactly how much time your employees are spending serving customers versus doing side work.
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