Jeffrey (Jeff) H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in Law360 Employment Authority, in “DOL's Final Tipped Wages Rule Still Falls Short, Attys Say,” by Daniela Porat. (Read the full version – subscription required.)
Following is an excerpt:
The U.S. Department of Labor's final rule on tipped wages is a step up for employee rights, but persistent ambiguity about what defines tip-producing versus tip-supporting work, as well as the rule's "taxing" administrative requirements, spell continued problems for employers and workers alike, attorneys said.
The finalized rule bolsters protections for tipped workers by limiting the circumstances in which they can earn the subminimum tipped wage. Under the Fair Labor Standards Act, tipped workers can earn as little as $2.13 per hour as long as tips carry the worker to the standard federal minimum wage, which is $7.25.
Specifically, the rule hopes to ensure tipped workers earn full minimum wage once they perform "a substantial amount of directly supporting work that does not itself produce tips."
To achieve that, the rule codifies the 80-20 principle, which requires employers to pay full minimum wage to a tipped worker who spends more than 20% of the workweek on tasks not directly engaged in tip-producing work. Employers must also pay full minimum wage to tipped workers once they spend more than 30 minutes of uninterrupted time on tip-supporting work.
Tip-producing work includes any time a worker is serving a customer and doing tasks that can earn them tips. Directly supporting work is distinguished as work that is "performed in preparation of or otherwise assists" in tip-producing work, according to the rule. …
Better But Not Enough
Jessica Looman, acting administrator for the DOL's Wage and Hour Division, told Law360 the agency sought to clarify the difference between tip-producing work and tip-supporting work in the rule's final iteration — a major concern for stakeholders.
A worker can simultaneously be doing tip-producing and tip-supporting work, provided that the latter task is encompassed within the realm of serving customers. …
The rule said general food preparation, including salad assembly, is not part of a server's tipped occupation, but garnishing plates before taking them out of the kitchen, adding dressing to pre-made salad and toasting bread as a side to prepared eggs can be part of a server's tip-producing table service. …
Despite the DOL's efforts to define tip-producing as broadly encompassing customer service, the definitions of what counts as tip producing versus tip supporting in practice remain opaque, said Jeffrey Ruzal, a member of management-side firm Epstein Becker Green and a former trial attorney for the Office of the Solicitor for the DOL.
"It's still potentially less than clear that work that is attendant to performing service to a customer in a way really does constitute tip-producing work," he said. "That's the fuzzy line." …
'Heartburn' Analysis
The rule is effective Dec. 28, and employers should start preparing now.
"I think there's a lot they have to do to prepare, and I think it's very administratively taxing," said Epstein Becker's Ruzal.
In line with previous advice he has provided clients, Ruzal said employers should look closely at the duties of service employees and do a time study to evaluate whether, for example, the 30-minute rule is potentially being compromised or violated.
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