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Fair Labor Standards ActMarch 5, 2019by Stanton LawNavigating the FLSA Tip Credit: Part 2 — What is a Tipped Employee?

by Amy Thomson.

Navigating the FLSA Tip Credit: Part 2 — What is a Tipped Employee?

Don’t miss our previous post where we introduced the FLSA tip credit, and be on the lookout for more posts as we continue to delve into this important topic. Today, we’re looking at who qualifies as a tipped employee.

Who Qualifies as a Tipped Employee?

Tipped employees work in an occupation where they customarily and regularly receive more than $30 per month in tips. Tipped employees can be full-time, part-time, permanent, or temporary workers.

What Types of Occupations Qualify as Tipped Employees?

Tipped occupations usually include:

  • Wait staff
  • Service bartenders
  • Counter personnel who serve customers
  • Bussers
  • Bellhops
  • Barbers and hairdressers

Examples of non-tipped occupations include:

  • Dish washers
  • Cooks
  • Chefs
  • Janitors

$30 Monthly Minimum Tip Requirement

The individual employee must receive more than $30 per month in tips to qualify as a tipped employee. If the employee does not receive the minimum tip requirement, then the employee does not qualify as a tipped employee. This requirement is critical, even if the employee is part of a group (such as the wait staff) whose other group members qualified because they each individually received more than $30 per month in tips.

The FLSA does provide an exception to this requirement when an employee works less than a full month in their first or last month of employment. The monthly minimum tip requirement is likely met if the employee’s tips exceed $30 per month on a pro rata basis.

Regularly and Customarily Receive More than $30 per Month in Tips

Under the “regularly and customarily” requirement, tipped employees must receive the required amount in tips regularly but not necessarily on a constant basis. For example, if any employee regularly and customarily receives more than $30 per month in tips, they qualify—even if on occasion they receive less than the required amount because of sickness, vacation, or schedule fluctuations. On the other hand, if an employee only receives tips occasionally totaling more than $30 per month—such as during the holiday season when customers are more generous—but they don’t usually receive tips, then they would not meet this requirement.

Questions about Tipped Employees?

If you have any doubt as to whether an employee qualifies as a tipped employee, don’t hesitate to reach out to the Atlanta employment attorneys at Stanton Law. We’re here to make sure you get answers to your questions before they become expensive problems. Stanton Law attorney Amy Thomson is available to help you at 404-531-2341.