Paying Tipped Employees for Non-Tipped Activities

The Department of Labor (DOL) has addressed the thorny issue of when to pay tipped employees for non-tipped activities. In its Opinion Letter, FLSA2018-27, the DOL changes its prior position and clarifies the language in 29 C.F.R. §531.56(e) regarding when an employer can take the tip credit for duties performed by tipped employees that are generally considered non-tipped activities. Under the Fair Labor Standards Act (FLSA), all employers are generally required to pay non-exempt employees a minimum wage under the federal FLSA. There is an exception for tipped employees. A tipped employee is defined under the FLSA as any employee engaged in an occupation in which she or he customarily and regularly receives no less than $30 a month in tips. This exception allows employers to pay such employees a cash wage of no less than $2.13 an hour and take a “tip credit” toward the employer’s minimum wage obligation to make up the difference between the cash wage paid and the federal…