FLSA2009-12 — Barbacks as tipped employees and section 3(m)

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

FLSA2009-12

January 15, 2009

Dear Name*:

This is in response to your request for an opinion regarding whether employees known as
“barbacks” qualify as tipped employees for the minimum wage tip credit under the Fair
Labor Standards Act (FLSA).
1
We believe a barback, as you describe the position,
would qualify as a tipped employee, and be eligible for a tip credit, provided the FLSA
requirements for this provision are met.

You state that your client is a restaurant and bar that employs both bartenders and a
barback on a nightly basis. You also state that the term “barback” refers to a bartender’s
assistant who learns the profession of bartending under the tutelage of a bartender and
whose primary job duty is to support the bartender. The barback typically works the
same hours as the bartender and is responsible for restocking the bar and ensuring that the
bar area remains clean and organized. You indicate that the barback may also bus the
service counter, clean empty glasses sitting on the bar, take out the trash from behind the
bar and clean the floor of the bar area. You state that the barback works primarily in the
bar area, in front of and around customers, and has the opportunity to occasionally
interact with customers.

You further state that your client currently pays the barback the minimum wage, but the
barback also receives over $30 in tips per month from the bartenders that he or she
supports. Moreover, you state that a barback is an occupation that regularly and
customarily receives tips from bartenders for providing services. For purposes of this
letter, we assume that your description of this tip sharing arrangement between the
barback and the bartenders reflects common practice in the locality in this type of
establishment. See
FOH § 30d04(d); Wage and Hour Opinion Letter October 26, 1989
(copy enclosed) (custom in the locality and industry is considered in determining whether
employees regularly receive tips themselves or share in tip pools). You want to know
whether the barback in this case may qualify as a tipped employee under the FLSA when
the only tips received by this employee are those obtained from the bartenders under this
tip sharing arrangement.

Pursuant to section 3(m) of the FLSA, an employer may take a credit towards the
minimum wage for a “tipped employee” provided the employer informs the employee of
the provisions of this section of the law and the tipped employee retains all the tips
received. The latter requirement does not prohibit “the pooling of tips among employees

1
Unless otherwise noted, any statutes, regulations, opinion letters, or other interpretive material cited in
this letter can be found at
www.wagehour.dol.gov

2
who customarily and regularly receive tips.” 29 U.S.C. § 203(m). Section 3(t) of the
FLSA defines the term “tipped employee” as “any employee engaged in an occupation in
which he customarily and regularly receives more than $30 a month in tips.” 29 U.S.C.
§ 203(t). Tips actually received by tipped employees may be counted as wages for
purposes of the FLSA, but the employer must pay not less than $2.13 an hour in direct
wages.
2

The legislative history of the 1974 FLSA Amendments indicates that the tip pooling
exception in 29 U.S.C. § 203(m) applies to “the practice of pooling, splitting or sharing
tips with employees who customarily and regularly receive tips—e.g., waiters, bellhops,
waitresses, countermen, busboys, service bartenders, etc.” S. Rep. No. 93-690, at 43
(1974); FOH § 30d04(a). On the other hand, “the employer will lose the benefit of this
exception if tipped employees are required to share their tips with employees who do not
customarily and regularly receive tips—e.g., janitors, dishwashers, chefs, laundry room
attendants, etc.” Id. The use of the words “e.g.” and “etc.,” indicates that the
occupations in these two lists are examples, and that the lists are not intended to be
exhaustive.

The legislative history includes bus persons (“busboys”) in the list of occupations that
may participate in tip pools, although they do not receive tips directly from the
customers. See id. at 43. These employees customarily and regularly receive tips from
their participation in tip pooling or tip sharing arrangements with the servers. “Where
employees practice tip splitting, as where waiters give a portion of their tips to the
busboys, both the amounts retained by the waiters and those given the busboys are
considered tips of the individuals who retain them, in applying the provisions of section
3(m) and 3(t).”
29 C.F.R § 531.54.

It does not matter that in this case the barback receives his or her tips exclusively from
the bartenders, rather than directly from the customers. As indicated above, the
legislative history and the Department’s regulations provide that some employees, e.g.,
bus persons, who derive their qualifying tip income exclusively from tip sharing or tip
pooling arrangements can nonetheless qualify as tipped employees, provided they meet
the other requirements of the law. See Kilgore v. Outback Steakhouse of Fla., 160 F.3d
294, 301-2 (6th Cir. 1998) (upholding a tip pool in which certain employees derive their
tip income solely from the tip pool); Marshall v. Krystal Co., 467 F. Supp. 9, 13 (E.D.
Tenn. 1978) (finding that waiters, bus persons, and bartenders are permitted to derive
their tip income from the tip pool); see also FOH § 30d04:

It is not required that all employees who share in tips must themselves
receive tips from customers. The amounts
retained by the employees who
actually receive the tips, and those given to other pool participants are
considered the tips of the individuals who retain them, in applying the
provisions of sections 3(m) and 3(t).

2
“If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal
the minimum hourly wage of $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24,
2009; the employer must make up the difference.”
Wage and Hour Fact Sheet No.15.

3
FOH § 30d04(a); Wage and Hour Opinion Letter March 26, 1976 (copy enclosed) (“It is
not required that the particular busboys and others who share in tips must themselves
receive tips from customers.”)

We believe that the barback you describe qualifies as a tipped employee within the
meaning of section 3(t) of the FLSA, because he or she is engaged in an occupation in
which he or she customarily and regularly receives more than $30 a month in tips.
Therefore, the barback is also a “tipped employee” within the meaning of section 3(m),
and the employer can take a tip credit for that employee provided that the FLSA
requirements are met, including the proviso that a tipped employee must receive at least
the minimum hourly wage through the employer’s cash wage payment and tips received.
This conclusion is consistent with the legislative history of the Act, which included
employees who do not receive tips directly from customers, such as busboys and service
bartenders, within the categories of employees who were eligible to participate in a tip
pool because they “customarily and regularly” received tips, whether through tip pools or
tip sharing arrangements with other employees.

This opinion is based exclusively on the facts and circumstances described in your
request and is given based on your representation, express or implied, that you have
provided a full and fair description of all the facts and circumstances that would be
pertinent to our consideration of the question presented. Existence of any other factual or
historical background not contained in your letter might require a conclusion different
from the one expressed herein. You have represented that this opinion is not sought by a
party to pending private litigation concerning the issue addressed herein. You have also
represented that this opinion is not sought in connection with an investigation or litigation
between a client or firm and the Wage and Hour Division or the Department of Labor.

We trust that this letter is responsive to your inquiry.

Sincerely,

Alexander J. Passantino
Acting Administrator

* Note: The actual name(s) was removed to preserve privacy in accordance with 5
U.S.C. § 552(b)(7).