Law Office of David Miklas, P.A.

Labor & Employment law - Employers only

No, this would violate the law.  Many Florida businesses use the tip credit.  This is common for bars and restaurants where employees regularly receive tips from customers.

Florida’s minimum wage is currently $12/hour, but businesses are allowed to take a “tip credit” of $3.02 for employees who regularly receive tips.  President Biden’s Department of Labor revised and added to a regulation about when an employee works in a “tipped occupation” under § 203(t) of the Fair Labor Standards Act (FLSA). See 29 C.F.R. § 531.56(e), (f). This new rule permits an employer to take a tip credit, not only for an employee's tip-producing work, but also for other work that “directly supports tip-producing work, provided that the employee does not perform that work for a substantial amount of time.”

So, it is obviously important to know what is a “substantial amount of time.”  Well, that is what has been changed under President Biden’s Department of Labor.  Now employers must be aware that a “substantial amount of time” exists when:

(i) The “directly supporting work” exceeds a 20 percent workweek tolerance, which is calculated by determining 20 percent of the hours in the workweek for which the employer has taken a tip credit. The employer cannot take a tip credit for any time spent on directly supporting work that exceeds the 20 percent tolerance. Time for which an employer does not take a tip credit is excluded in calculating the 20 percent tolerance; or

(ii) For any continuous period of time, the directly supporting work exceeds 30 minutes. If a tipped employee performs directly supporting work for a continuous period of time that exceeds 30 minutes, the employer cannot take a tip credit for any time that exceeds 30 minutes. Time in excess of the 30 minutes, for which an employer may not take a tip credit, is excluded in calculating the 20 percent tolerance mentioned above.

So, it is this second situation that triggers the 31 minute example of rolling silverware.  See how 31 minutes “exceeds 30 minutes” of continuous time? 

So, what types of activities do you have to monitor to see if they are exceeding 30 minutes?  Well, the following:

- if a server folds napkins for the dinner rush after her lunch customers leave, or

- if a server rolls silverware for 15 minutes at the end of the night while waiting for their last
table to pay their bill,

such side work would be categorized as “directly supporting work” because this work is not being performed as part of the tipped employee’s service to customers for which they receive tips.

On  the other hand, if a server is assigned to a general task such as filling condiment containers to be completed during the breakfast shift during lulls in customer service, that would be “directly supporting work” since it is preparatory work and is not part of providing service to a customer for which the employee receives tips. As a result, these tasks would count against the 20 percent and 30-minute limits.

To claim the tip credit, employers must ensure that tipped employees are not spending more than 20 percent of their time on directly supporting work, or more than 30 minutes continuously performing such duties.

How do you ensure that? Well, you have to track the employee’s time. 
One federal court recently explained, “We cannot fathom how an employer could honor these specific constraints without recording employee time. What if an employer is investigated by the Department [of Labor] or sued by an employee for wrongly claiming the tip credit? Without time records, how could an employer defend itself?" See Rest. Law Ctr. v. United States DOL, 66 F.4th 593, 598-99 (5th Cir. 2023)

(citing Rafferty v. Denny's Inc., 13 F.4th 1166, 1190-91 (11th Cir. 2021) (emphasizing the employer's duty to create time records where an employee claimed to perform non-tipped duties for more than 20 percent of her time).

The Court also said that it could not imagine an situation where “an employer would not have to track employee minutes to comply with a rule premised on the exact number of consecutive minutes an employee works.” Id.

The Court concluded that the new rule itself “confirms that employers who want to continue claiming the tip credit . . . will ‘incur ongoing management costs’ to ensure employees do not spend more than 30 minutes continuously performing directly supporting work.”

So, as a practical matter, if your restaurant opens at 11:00 am and you have your servers come in at 10:00 am to roll silverware and top off condiment bottles, that exceeds the 30 minute time limit, so for that first hour before the restaurant opens, you cannot pay the servers $8.98/hour (which would be taking the tip credit).  Instead, you would have to pay them the full minimum wage ($12/hour) for that first hour before the restaurant opens.

Feel free to call our office at
1-772-465-5111 or email us if you would like to discuss this further.  Many restaurants are likely unaware of this change in the regulations that were rolled out when the President changed.

Are you allowed to pay less than $12/hour for a server who rolls silverware for 31 minutes?