A recent federal court ruling denies the tip credit for employees who spend a considerable amount of time performing tasks for which they will receive no tips. Department of Labor regulations state that if an employee spends more than 20% of their time performing general preparation work or maintenance, the tip credit cannot be claimed for that time and the employee would be paid federal minimum wage for those hours.
Applebee’s was taken to court by former and current servers and bartenders. The plaintiffs testified that Applebee’s required them to clean and set up the restaurant before it opened and after it was closed. They were required to clean bathrooms during their shifts, to sweep the restaurant, to clean and stock service areas, roll silverware, and do other duties not directed at specific customers. Applebee’s claimed the tip credit for all work performed by servers and bartenders, even when more than 20% of their time was spent in preparation and maintenance.
The court’s ruling against Applebee’s said it is up to the plaintiffs to provide evidence of hours not properly compensated. If Applebee’s cannot provide documentation of the hours the employees spent on specific duties, then the burden of proof will fall on Applebee’s to show that the plaintiffs’ calculations were unreasonable.
