Can a restaurant pay only in tips?
No. Even though servers get tips, a restaurant must still pay at least the server minimum wage of $5.69. Here is how it works.
In Connecticut, our normal minimum wage is $8.25 per hour (a dollar more than the federal!). A restaurant may pay less than this to servers who are waiting on tables, if they get tips. They can take what is called a “tip credit” of up to 31% and pay as little as $5.69 for the time they are waiting on customers and getting tipped. Even if the server earns more than the minimum wage in tips, the restaurant still owes at least $5.69 for all hours worked as a server.
The Connecticut Department of Labor has a great explanation on its website.
This rule only applies, however, to the time spent actually being a server and does not apply to time spent doing other things, such as general cleaning and stocking duties. The Connecticut DOL explains:
An employer in the restaurant business may not take a tip credit during the time which any employee is performing non-service duties such as the following:
1. Cleaning the rest rooms.
2. Preparing food.
3. Washing dishes.
4. Host or Hostess work. (Note: each waiter or waitress may show patrons to their seats within their own service area without losing their “service” classification, but if a waiter or waitress shows all patrons to their seats, there can be no tip credit taken on that employee and the full minimum wage must be paid)
5. General set-up work before the restaurant opens.
6. Kitchen clean-up.
7. General cleaning work.
8. Waiting on take-out customers.
These duties are sometimes referred to as “side-work.” Time spent performing these duties must be segregated and paid at the full minimum wage. If it is not, then no tip credit can be taken for the entire shift. Servers should check to see if they are being paid properly under this law.