Bartenders and servers almost always are subject to the "tip credit" that makes up the difference between their hourly pay rate, which is $2.13, and the minimum wage. A group of current and former servers and bartenders at Applebee's restaurants filed a class action lawsuit under the federal Fair Labor Standards Act seeking unpaid wages and challenging the application of the "tip credit" to non-tip producing duties they performed during their shifts. Thus, the case presented the question of whether and to how much working time does the "tip credit" apply to time spent on tasks that produce no tips for the bartender or server.
The United States Court of Appeals for the Eighth Circuit ruled recently in Fast v. Applebee's International, Inc., Nos. 10-1725/10-1726 ( April 21, 2011), as follows:
employees who spend 'substantial time' (defined as more than 20%) performing related but non-tipped duty should be paid the full minimum wage for that time without the tip credit[.]
The import of this ruling is that the "tip credit" does not apply to all the hours worked by a bartender, server or other tipped employee, provided that he or she spends more than 20% of the working time performing nontipped tasks and duties.
