May an employer claim the minimum wage tip credit for employees who do not spend all their time waiting tables or performing other tip-producing activities?

Author: Michael Cardman, XpertHR Legal Editor

Yes. The Fair Labor Standards Act permits an employer to take the minimum wage tip credit for some time that tipped employees spend in duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips. For example, a waitperson who spends some time cleaning and setting tables, making coffee and occasionally washing dishes or glasses is considered to be engaged in a tipped occupation even though these duties are not tip-producing. However, when a tipped employee spends a substantial amount of time (in excess of 20 percent in the workweek) performing related duties, no tip credit may be taken for the time spent in such duties. When an employee is employed by one employer in both a tipped and a non-tipped occupation, such as an employee employed both as a maintenance person and a waitperson, the tip credit is available only for the hours spent by the employee in the tipped occupation.