Are you a restaurant employee who has been forced to work lengthy periods of time on non-tipped activities at a subminimum wage? A recent case from the United States Court of Appeals for the Ninth Circuit reiterates the principle that if you are going to pay a restaurant worker a subminimum wage (in Maryland, that rate is $3.63/hour), the worker cannot be spend more than twenty percent (20%) of their shift performing non-tipped work.

In Marsh v. J. Alexander's LLC, -- F. 3d ---, 2018 WL 4440364, *1 (9th Cir. Sept. 19, 2018) (en banc), the Ninth Circuit, sitting en banc, ruled that tipped restaurant workers, like servers and bartenders, must be paid the full minimum wage for time they perform “nontipped” tasks, if those nontipped tasks occupy more than 20% of a worker's workweek. In the case, the plaintiff had worked as a server, but alleged that he spent almost half of his time working on tasks that did not produce tips, like stocking ice, cleaning the restrooms, and cutting fruit. The plaintiff's employer had argued that because his non-tipped tasks were related to his tipped tasks, it could take a tip credit against his minimum wage and pay him at the lower tipped-employee rate for all the time he worked.

The Ninth Circuit based its ruling on a series of interpretations of the Fair Labor Standards Act (FLSA), as set forth in the Wage and Hour Division's Field Operation Handbook (“FOH”) of the U.S. Department of Labor (“DOL”). Tbe FOH analyzes various sections of the FLSA. Because the FOH was not passed by Congress, it is not the law, and courts have to decide whether they will defer to DOL's interpretation. The DOL had previously advised that tipped employees that spent more than 20% of their time working on non-tipped tasks needed to be paid the full minimum wage for those non-tipped tasks.

The Ninth Circuit in Marsh decided that it would follow the FOH's 20% rule, and held that under the FLSA, when tipped employees spend more than 20% of their workweek working on non-tipped tasks related to their tipped tasks, they are entitled to the full minimum wage for their time spent on those non-tipped tasks. For example, a restaurant server who works 40 hours a week, 10 of which are spent cleaning their section after close, must be paid the full minimum wage for those 10 hours of cleaning.

If you are a restaurant worker and believe that you spend more than 20% of your time performing non-tipped work, please give us a call for a confidential consultation to discuss your rights.