Maryland Caps Time Tipped Employees May Spend Cleaning and More

Author: Michael Cardman, XpertHR Legal Editor

January 23, 2014

A new regulation that took effect in Maryland this week could limit the amount of time that wait staff, bartenders and other tipped employees may spend cleaning tables, making coffee or performing other similar duties.

Maryland law allows an employer to claim half of the minimum wage (currently $3.63 per hour) in employees' tips as a credit toward the minimum wage.

Under the new regulation, which took effect January 20, 2014, tipped employees who spend more than 20 percent of their work time performing non-tip producing duties directly related to their tipped occupation must be paid the full minimum wage for that time. COMAR 09.12.41.19, as amended by 40-21 Md. Reg. 1801.

The regulation does not define what constitutes non-tip producing duties directly related to their tipped occupation. However, a look at how federal tip credit rules are interpreted may provide some helpful insights.

A Fair Labor Standards Act (FLSA) regulation, 29 CFR § 531.56, provides the following as examples of related duties:

  • Cleaning and setting tables;
  • Toasting bread;
  • Making coffee; and
  • Occasionally washing dishes or glasses.

Unlike the new Maryland regulation, this federal regulation does not place any particular limit on the amount of time an employee may spend performing these duties. But the US Department of Labor's Field Operations Handbook states that the FLSA tip credit may not be claimed when tipped employees spend more than 20 percent of their time performing general preparation work, maintenance or other such duties. FOH 2.30d00(e).

Although the Handbook is not a regulation, its 20 percent standard represents an interpretation of the FLSA that is owed deference under Supreme Court jurisprudence, one federal appeals court held. Fast v. Applebee's Int'l, Inc., 638 F.3d 872 (8th Cir. 2011), cert denied, 132 S. Ct. 1094 (U.S. 2012).

The plaintiffs in the Fast case were bartenders who were unable to earn tips while keeping their bar areas cleaned and stocked. They also performed several other duties that, they argued, did not constitute tip-producing work under the FLSA, including:

  • Stocking a bar with garnishments and alcohol;
  • Managing a money drawer;
  • Picking up napkins and straightening chairs;
  • Mopping the floor; and
  • Cleaning a blender, drink machine, dishwasher, drink station, bottle rack and beer cooler.

The 8th Circuit did not ultimately determine which, if any, of these duties were tip-producing.

Until further guidance or case law emerges, employers that claim a tip credit can err on the side of caution by limiting the amount of time tipped employees spend performing any of the aforementioned duties.