Overtime for tipped employees

What is the name of your state? Maryland

I am having some trouble determining overtime for employees whose primary earnings are received as a gratuity from a service charge in Maryland, as banquet servers are. (The employer charges an x% gratuity on food and beverage and then allocates a portion of that gratuity to banquet servers). I do not see anything in the FLSA web resource stating that such "tipped", if you will, employees are exempt from overtime although I believe that to be the case. Additionally, when other employees who normally receive wages and not gratuities work as banquet servers, are we obligated to pay them overtime when they exceed 40 hours due to serving banquets?

I would appreciate any help, and if you can supply a link to a resource, that would be terrific.

Where an employer pays a cash wage to a tipped employee in excess of the amount required by Sec 3(m) and also wishes to claim the full tip credit amount, the employee's regular rate of pay for OT purposes is the sum of the cash wage paid and the tip credit amount claimed, (FOH 30d07c).

Here is an explanation of how to calculate it:

http://www.restaurant.org/legal/law_ot.cfm

As for how to calculate OT when you have a mix of regular hours and tipped hours ~ that will depend on what task was happening when the OT happened. If they worked banquet hours the first part of the week, and the regular on the next part, then the OT rate would be on the regular tasks. If they work the regular job first part of the week, but then get the OT on the banquet tasks, then it'll be at the rate that calculate from the website above.

It does look like Chinese overtime calculating the OT if you are using the tips as part of the wages when making sure that you pay minimum wage. Luckily now, all our servers are paid above minimum wage, so I no longer have to deal with it.

Keep in mind that in FL the state minimum wage including tipped wages is higher than the federal.


Florida Tip Wages $3.77
Florida MW $6.79 eff 1/01/08

Federal Tip Wages $2.13
Federal Tip Credit $3.72
Federal MW $5.85 eff 7/24/07

In overtime weeks the higher rate is enforce under FLSA

Thank you all for taking the time to respond. I think there is some confusion between the post which applies to associates who receive a gratuity as an employer service charge billed to a client and tipped associates. We have both here at the hotel, and in the past, the associates receiving the portion of the service charge have not been paid overtime. Additionally, I found this very surprising information on MD's website

Certain employees and establishments are exempt from the overtime provisions but must pay their employees minimum wage. The following employers are exempt from overtime but subject to minimum wage: ...; employers operating a hotel, motel, restaurant, gas service station, ...
retreived from http://www.dllr.state.md.us/labor/minwagefacts.htm on May 14,2008

Does the Federal Labor law still supercede this?? Does this mean I am justified in not paying overtime to any associate? I was very shocked to see that any state would do that.

Thanks again.

Federal alws always trump state and local laws. Don't get confuse with state law and the $250,000 exempt employer. Under federal law the employer may not be a covered employer, however the employee may be individually covered on the same federal law, such as handling good in interstate commerce, while the state may exmpt that employee, the federal rules are still applicable.

Read this link under individual coverage...

http://www.dol.gov/esa/regs/compliance/whd/whdfs14.pdf