Under federal law, all employees are entitled to receive at least the federal minimum wage from their employers. However, employers can pay tipped servers as little as $2.13 an hour if
hey generate at least $30 per month in tips and spend less than 20 percent of their shift on non-tip generating work.
The DOL has proposed a new rule to allow employers to claim the tip credit for workers who spend more than 20 percent of their time performing non-tipped duties. Employers would be able to assign tipped workers unlimited side work — while still paying the meager wage of $2.13 an hour — as long as the work is “contemporaneous with, or within a reasonable time immediately before or after” the tipped work.
The proposed rule is not limited to restaurant workers but to all workers who rely on customer tips to supplement the minimum wage, including workers at nail salons, car washes, delivery services, airports, etc.
Opponents say the new rule would allow employers to exploit tipped workers by assigning them myriad non-tip generating duties, such as washing dishes and food preparation, that would make it difficult for them to earn tips.
Judy Conti, a spokesperson for the union-backed National Employment Law Project (NELP), said the DOL’s proposed rule change makes it “perfectly legal for employers to take advantage of tipped workers and have them perform excessive amounts of non-tip-generating work while being paid only $2.13 per hour.”
She added, “DOL is again doing the bidding of corporate America rather than the workers it is supposed to protect.”
Patricia Barnes, Forbes