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Completing non-tipped work under the 80/20 rule

In the state of New York, many waitresses and waiters who work at restaurants make their income through tips. When these workers are required by employers to also complete an exorbitant amount of non-tipped work, they could be making essentially less than minimum wage. To prevent this, the 80/20 rule exists.

The 80/20 rule, fostered by the Department of Labor as part of the Fair Labor Standards Act, states that if side work takes up more than 20 percent of a tipped worker’s workweek, the employer cannot claim a tip credit and must pay them at least minimum wage.

The tasks that fall under this rule vary widely but generally include setting up glasses and dishes, slicing garnishes and setting up condiments, rolling silverware, sweeping and stocking. Effectively, many tasks related to the tipped job are often expected to be completed, but may fall under the 20 percent part of the 80/20 rule.

If the workers are required to do their normal tipped job and separate non-tipped work for 20 percent or more of their time, the employer is required to pay at least minimum wage for this work. For example, the second job may include hosting, expediting or cooking.

While the 80/20 rule provides a guide for ensuring that a worker is paid fairly, it is not found in a binding regulation. Therefore, some jurisdictions are split on whether or not a violation of this rule is a valid cause of action under the Fair Labor Standards Act. If your workers believe they are not being paid fairly for non-tipped work, an attorney could determine if they may have the grounds to seek compensation for back pay.