Unlike attorneys, people in the restaurant industry aren’t accustomed to accounting for their time in 30-minute increments. Yet the hotly contested 80/20 tipping rule is necessitating precisely that. The rule, which went into effect on December 28, 2021 stipulates that workers can only be paid the tipped minimum ($2.13 per hour under federal law) for tasks that directly support tipped work and comprise no more than 20% (or 30 consecutive minutes) of a worker’s time.
Whether or not the law is repealed, it’s being enforced now and restaurant owners and operators need to get up to speed, and fast, to ensure they get–and stay–in compliance.
At its core, the rule categorizes server work into three main buckets: tip-producing work (think serving food to a table of guests), work that directly supports tip-producing work (consider setting the dining room in anticipation of guests), and work that is not tip-producing (work like cleaning restrooms and restocking).
While it might seem like a herculean task to ask employees to track which of these three types of work they are doing at any minute during their shift, it’s actually easier and less painful than you would imagine if you establish a policy and leverage the right technology, the right way to enforce it—which is to say with a balance of automation and attestation.
Step 1: Create a Policy, Create Expectation
Create a restaurant policy, with legal guidance, that lays out the ways in which your restaurant is putting compliance measures in place. Share this policy with current employees and all new employees as part of their onboarding. This lays out the expectations for how you, and your employees, will work together to ensure compliance.
Step 2: Build in Automation with Secondary Job Codes for all Servers
Most restaurants right now only have one job code for servers or bartenders. Restaurant management needs to create a second job code for a non-serving role. This way each server has access to two job codes.
Step 3: Train Employees
Train employees to understand the distinction between tip-producing and supporting work and non-tipped work; and the importance of clocking out of one role and into another if they are going to be performing non-tip-producing work for more than 30 minutes. This will empower employees to clock in using the right code.
Step 4: Implement a Fail-Safe with Attestation
By prompting employees at the end of each shift to answer if 20% or more than 30 consecutive minutes of their shift was performing non-tip-producing work, we add in an extra layer of protection. This attestation is a powerful supplement to the automated measures you’re putting in place. The power of the attestation is that it provides an employee who was perhaps too busy during their shift to clock in and out of the respective tip-producing and non-tip-producing roles to not only click “yes” or “no,” but to provide a detailed description if the former.
Step 5: Seal the Compliance Deal with Validation
If you want to go the extra mile, adding in a layer of managerial validation provides a further layer of transparency and protection. With SpotOn, for example, a manager can’t approve a clock-in in which an employee has attested to working more than 20% or 30 consecutive minutes in a non-tip-producing capacity until they address that comment. So we add in a layer of validation.
Restaurant owners who implement a simple, streamlined, system like this have a transparent—and near irrefutable—record of their compliance. This really is as close to perfect a solution you could implement for an imperfect legislation.
Peter Lambros, Director of Product, SpotOn Labor Management Center is the co-founder of Dolce Software, acquired by SpotOn in 2021, a complete labor management solution that includes scheduling, labor compliance, automated tips distribution, and enhanced payroll integrations with over 20 payroll providers. Peter was an operator of a multi-unit restaurant group spanning quick serve and full serve, for 20+ years. With his background of asset management and development, Peter’s pursuit of operational efficiency and business modeling became the driving force behind Dolce’s integrated approach to labor management.
