The U.S. Department of Labor has issued a highly anticipated ruling on the hot topic of wages for tipped workers.
Ohio law firm Vorys confirmed the ruling on Twitter, tweeting that "On 10/28/21, the U.S. Department of Labor (DOL) published its final rule that limits the amount of time tipped employees can spend in non-tipped activities during periods that an employer utilizes the tip credit."
The ruling is an attempt to protect tipped workers from having to do work that is untipped at a wage that is not up to standard. Under the ruling, an employer is allowed to take a "tip credit" against its obligation for wages to its employees as long as the tips plus wages is equal to or exceeds the federal minimum wage of $7.25.
According to Vorys, "An employer can take a tip credit only when the tipped employee is performing tip-producing work or when the tipped employee is performing work that directly supports tip-producing work as long as the tipped worker does not spend a substantial amount of time doing tip-supporting work. The rule defines a substantial amount of time as more than 20% of the hours worked during the employee’s workweek or a continuous period of time that exceeds 30 minutes."
The regulation is slated to take effect on Dec. 28. Employers that do not already have bookkeeping in place for tracking tasks performed by tipped employees are encouraged to do so, as any credit given will require detailed records. In the event of litigation, employers are protected by detailed records. The regulation is not expected to affect states that have a direct cash minimum wage of $7.25 or do not have a tipped minimum wage.
