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Restaurants & Hospitality: Managing Part-Time Worker Payroll (2026)
Part-time payroll in restaurants carries the same withholding and overtime rules as full-time, and part-time hours count toward the ACA employer mandate at 120 hours a month per full-time equivalent, which is where a restaurant with many part-time servers reaches 50 before its headcount does. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Rules that matter for part-time restaurant staff
The 2021 dual jobs rule that limited tip credits when non-tipped support work exceeded 20 percent of the workweek or 30 continuous minutes was vacated by the Fifth Circuit on October 29, 2024. The Department of Labor removed that text from 29 CFR 531.56 and restored the original 1967 dual jobs regulation effective December 17, 2024.
A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer taking a tip credit must pay a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour against the $7.25 federal minimum wage, and overtime for tipped employees must be calculated on the full $7.25 minimum wage, not the cash wage.
The arithmetic
Overtime is owed after 40 hours in the workweek regardless of part-time status, and a part-time employee who picks up shifts across two roles has their regular rate blended across both. For the ACA, monthly hours of all non-full-time employees are pooled and divided by 120 to produce full-time equivalents; 60 part-time employees at 60 hours a month are 30 FTEs. For FMLA, a part-time employee counts as one employee toward the 50 threshold and is eligible personally only after 1,250 hours in the prior 12 months. At the BLS May 2025 national median for waiters and waitresses, $35,230 a year or about $17 an hour, a 20-hour week is $339 before tax.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- The 2021 dual jobs rule that limited tip credits when non-tipped support work exceeded 20 percent of the workweek or 30 continuous minutes was vacated by the Fifth Circuit on October 29, 2024. The Department of Labor removed that text from 29 CFR 531.56 and restored the original 1967 dual jobs regulation effective December 17, 2024. [89 FR 101884 (December 17, 2024)]
- A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer taking a tip credit must pay a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour against the $7.25 federal minimum wage, and overtime for tipped employees must be calculated on the full $7.25 minimum wage, not the cash wage. [DOL Fact Sheet #15]
Read the full guide to ACA reporting and the employer mandate, and the rest of the restaurant payroll library.
Managed Payroll, Handled.
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Frequently Asked Questions
Do part-time servers at a restaurant count toward the ACA 50-employee test?
Yes, as full-time equivalents: their monthly hours are pooled and divided by 120. That is why the count is run from payroll hours every year rather than from headcount.
Is overtime owed to a part-time restaurant employee?
Yes, after 40 hours in a workweek, at time and one half on the regular rate. Part-time status changes benefits eligibility, not the overtime rule. The 2021 dual jobs rule that limited tip credits when non-tipped support work exceeded 20 percent of the workweek or 30 continuous minutes was vacated by the Fifth Circuit on October 29, 2024.
What does managed payroll cost for a restaurant?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Tip credit and tip pooling, high turnover and multiple pay rates are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Restaurants & Hospitality. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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