Effective December 28, 2021, the U.S. Department of Labor’s Tips Dual Jobs final rule clarifies when employers can take a tip credit for employees working in dual roles. For example, a hotel maintenance person also works in the hotel restaurant as a server. If this employee customarily and regularly receives at least $30 a month in tips for their work as a server, they are engaged in a tipped occupation—but only when they’re working as a server. The employee is employed in two occupations, and the employer can’t take a tip credit for the hours worked in the maintenance position.

The final rule clarifies that employers can only take a tip credit when:

• The worker is performing tip producing work; or
• As a tipped employee, they perform work that directly supports tip producing work for:
  • Less than 20 percent of their workweek hours worked, also referred to as a “20 percent tolerance” because employers can’t take a tip credit for any time that exceeds 20 percent of the workweek. The time that an employer doesn’t take a tip credit is excluded when calculating the 20 percent tolerance. 
  • Not more than 30 minutes. 

The final rule also amends Executive Order 13658—regulating the hourly minimum wage paid by contractors to workers who are performing work on or in connection with covered federal contracts— to be consistent with the dual jobs laws.