Tipped employees an the 80/20 rule in pay disputes

The provisions of the Fair Labor Standards Act require most employers in Texas and around the country to pay their workers at least the federal minimum wage and overtime rates when they work more than 40 hours during a workweek. Workers who allege that their employers violated the law are often able to support their claims with documents such as time cards and pay stubs, but these cases can be more difficult to prove when the workers involved receive some of their compensation in the form of tips.

Tipped employees like restaurant servers are not generally protected by the provisions of wage and hour laws, but they are entitled to receive minimum wage for non-tipped side work under the FLSA when they perform two or more jobs. Work that is tip-related but non-tipped, such as waiters or waitresses clearing or setting tables, is not covered by the 1938 statute.

There are two major limitations to the FLSA side work rule. Tipped workers must be paid at least the federal minimum wage for any work performed that is not incidental to their primary job. These duties could include vacuuming rugs or clearing ice and snow. Employees must also be paid minimum wage when side work accounts for 20 percent or more of their duties. While the 20 percent rule is merely a Department of Labor guideline and is not statutory, it has been followed by a number of federal courts including the U.S. Court of Appeals for the 8th Circuit.

Attorneys with experience in this area likely pay close attention to how the courts interpret laws like the Fair Labor Standards Act, and they may urge tipped workers to keep accurate records of their compensation and the duties they perform. Employers facing wage and hour claims often worry about other employees filing similar complaints, and attorneys could encourage them to reduce this risk by settling these matters quickly.

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