Payroll News

Connecticut’s Proposed Dual-Duties Rule in Final Review

July 10, 2020, 8:44 PM

Connecticut employers must separate and record time by tipped employees who spend at least two hours or more than 20% of a shift on nontipped duties to claim a tip credit under proposed regulations.

The rules were sent July 7 to the state attorney general for review. Approval is to be made by the Legislative Regulation Review Committee.

The attorney general is expected is expected to conclude the review Aug. 8. The finalized rule would take effect after it is posted by the secretary of state to the e-Regulations System website, the state labor department said.

2-Hour, 20% Provision

Under the proposed rule (PR2020-014), employers may not claim a tip credit for service employees who perform nonservice duties for at least two hours of a shift, or more than 20%, whichever is less, as part of the day’s minimum wage.

A tip credit may be allowed if the nonservice duties comprise fewer than two hours or up to 20% of a service employee’s shift. Nonservice duties must be separated and recorded by the employer to claim a tip credit as part of the minimum wage for the day, the rule said.

Gratuities may be considered part of the minimum wage if three conditions are met:

• the employee is engaged in employment in which gratuities are customary and recognized as part of compensation;

• the gratuity amount claimed as a minimum-wage credit is recorded on a daily, weekly, or biweekly basis in a wage record; and

• employers claiming a tip credit must provide substantial evidence, such as through an electronic or written statement, that employees received no less than the amount claimed as tip credit.

Service employees are those with duties that relate solely to food and beverages provided to seated patrons and customarily receive gratuities, the rule said. These workers also perform duties incidental to such service, it said.

Twenty-three duties considered “incidental to such service” were specified in the rule, the department said, rejecting a stakeholder suggestion that the list not be exhaustive and include an allowance for “similar” duties.

The list of duties include taking food or beverage orders, checking if customers are the legal age to drink alcoholic beverages, escorting customers to their table, checking if customers are satisfied, collecting payment, taking orders, preparing checks, presenting menus and answering menu-related questions, removing tableware, serving food, preparing or cleaning up tables, preparing and presenting beverages, stocking service areas, filling table-top containers, and garnishing and decorating dishes.

The state labor commissioner is required to adopt new rules and definitions related to the compensation of workers who perform tipped and nontipped duties under a bill (H.B. 7501) that Gov. Ned Lamont (D) signed Jan. 6, which was when the measure took effect.

The state’s hourly minimum wage is to rise to $12 from $11 on Sept. 1.

The tipped-employee minimum hourly cash wage is $6.38 for hotel and restaurant staff based on a $4.62 tip credit and $8.23 for bartenders based on a $2.77 tip credit, in 2019. The tip credits are to rise to $5.62 for hotel and restaurant staff and to $3.77 for bartenders Sept. 1.

To contact the reporter on this story: Christine Pulfrey in Washington at cpulfrey@bloombergindustry.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bloombergindustry.com

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