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NEW HIRING REQUIREMENTS

BUY SELL TRADE HR MATTERS DOL Clarifies Requirements Hiring in COVID-19 Aftermath By Griffen Wilson NEW & USED EQUIPMENT

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IN STOCK FOR IMMEDIATE DELIVERY On Oct. 28, the U.S. Department of Labor (DOL) announced the publication of a new rule for tip regulations under the Fair Labor Standards Act (FLSA). The new rule clarifies that employers may only take a tip credit for tipped employees when these employees are performing work that is part of their tipped occupation. The new rule becomes effective Dec. 28. Workers can only be paid the tipped minimum, established under federal law at $2.13 per hour, for tasks that directly support tipped work and do not take up more than 20% of a worker's time or 30 consecutive minutes. Tip Credit: Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal miniManftowoc· mum wage. Thus, the maximum tip credit that an employer can D6rmont· (l:J(•1•X?UiU currently claim under the FLSA section 3(m) is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13). Under certain circumstances, an employer may fl!!:.,,ijSouTHSENot be able to claim an additional overtime tip credit against its C-Store Drink overtime obligations. Dual Jobs: The DOL recognizes that some employees Sales up 10% routinely engage in both tipped and nontipped occupations. The convenience chan- These are known as “dual job” situations. However, the DOL nel is "bullish" on bever- also recognizes there is a difference between employees with dual jobs and employees who incidentally engage in nontipped age sales despite sales occupations, such as maintenance work and preparatory or growth deceleration in closing activities. the third quarter and The new rule clarifies that employers can take a tip credit growing concerns about for the time a tipped employee spends performing work that shortages, according to is not tip-producing (but directly supports tip-producing work) unless that work is performed for a substantial amount of time. a Beverage Bytes survey Tip-producing work is “any work performed by a tipped emfrom Goldman Sachs ployee that provides service to customers for which the tipped Equity Research. Con- employee receives tips.” Directly supporting work is work pervenience store beverage formed by a tipped employee in preparation of or to otherwise sales increased 10%, and assist tip-producing customer service work. Substantial amount of time: The new rule defines one chain representa- “substantial amount of time” as either (1) at least 20% of the tive said sales are ap- hours in the workweek for which the employer has taken a tip proaching their 2020 credit or (2) a continuous period of time of at least 30 minutes. pantry-loading height. The new rule provides a number of illustrations to help em____ .......... ____ ~_ -Source: BevNet ployers navigate different scenarios. Employers with tipped employees should review their current policies and procedures to prepare for the Dec. 28 effecTUESDAY, MARCH 1 Moretti’s (Edison Park) 6727 N. Olmsted, Chicago Call Now to Reserve Your Vendor Table: 847-699-3300 SHMOOZEFEST - MINI TRADE SHOW NETWORKING PARTY ----------tive date. For more on this topic, contact Griffen Wilson at Gwilson@ employco.com or 630-286-7381. See Employco’s listing in our Directory under Payroll Services and under H/R-Human Resource Services.

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