Our attorneys have earned a trusted reputation for protecting the rights of employees and employers throughout Pennsylvania.
  1. Home
  2.  → 
  3. employee rights
  4.  → Understanding the 80/20 rule for tipped workers

Understanding the 80/20 rule for tipped workers

by | Jul 24, 2017 | employee rights, Firm News |

In Pennsylvania and elsewhere in the U.S., waiters and waitresses get most of their pay through tips given by patrons. However, the restaurant industry has faced an increasing number of lawsuits due to the 80/20 rule, which states that side work cannot occupy more than 20 percent of an employee’s workweek without the employee being entitled to minimum wage.

Under the Fair Labor Standards Act, an employer must pay a tipped worker minimum wage if they perform one or more extra jobs that do not generate tips. For example, certain duties, such as washing and setting tables, making coffee or occasionally washing dishes are considered to be part of the tip-related duties. If the employee is taking on other jobs, such as shift manager, the employee must be paid at least minimum wage.

When it comes to the tip-related duties, there are limitations. First, the side work the employee is completing must be incidental to the tipped work. Incidental work includes dealing with the worker’s assigned seating section, rolling silverware and preparing drinks like coffee. Second, the side work cannot take up more than 20 percent of the worker’s time. For example, work that would be considered to be outside of the 20 percent of the 80/20 rule might include setting up produce, stocking the restaurant and cleaning prep stations.

For employees who work for tips, being required to work non-tip duties that are not incidental to their tip work can cause them to earn less than minimum wage. Because this can violate the FLSA, an employee rights attorney could file a lawsuit against the employer on behalf of the affected worker. Dependent on case circumstances, the attorney could help the worker seek compensation for back pay.