If you do, you must cease this practice immediately. In a recent case (Amaral Brothers, Inc. v. Department of Labor), the Connecticut Supreme Court found that employers cannot take advantage of a “tip credit” for delivery drivers in order to meet the state minimum wage.
Under Connecticut wage and hour law (Conn. Gen. Stat. § 31-60(b)), a tip credit may be taken for “persons, other than bartenders, who are employed in the hotel and restaurant industry . . . who customarily and regularly receive gratuities.” This law allows certain businesses (e.g. hotels and restaurants) to pay their “service employees” an hourly rate below the state minimum wage and “credit” a portion of the tips earned by the employee towards the required minimum wage.
In this case, a group of pizza delivery drivers had filed a class action lawsuit against their employer claiming that the employer improperly took a “tip credit” from their wages and, as a result, failed to pay them minimum wage in accordance with the law.
The employer, on the other hand, claimed that the employees were “service employees” and, as a result, eligible for the tip credit.
Connecticut law defines “service employees” as “any employee whose duties relate solely to the serving of food and/or beverages to patrons seated at tables or booths, and to the performance of duties incidental to such service, and who customarily receive gratuities.” The employer argued that delivery drivers were service employees because their job duties were similar to that of a waiter carrying food to a customer at a table.
The Connecticut Supreme Court disagreed. Instead, the Court found that delivery drivers do not fall within the scope of the tip credit because “the legislature did not intend that employees such as delivery drivers, who have the potential to earn gratuities during only a small portion of their workday, would be subject to a reduction in their minimum wage with respect to time spent traveling to a customer’s home and other duties for which they do not earn gratuities.”
Take home for employers
For those employers who employ delivery drivers, this ruling may impact how those employees are paid. If your company currently applies a “tip credit” to these employees, that practice must stop immediately. In addition, to the extent that your waitstaff also perform delivery services, the time spent performing those services is not eligible for a tip credit.