No; if waiters or bartenders spend more than 20% of their time doing non-tipped work such as setting up or prep work, the time spent performing these non-tipped duties is not subject to the tip credit and the employees must be paid at the ordinary minimum wage at least.
The federal Department of Labor has long taken the position and a federal court of appeals has upheld the Department's position that employees who spend "substantial time" (defined as more than 20%) performing related but nontipped duties should be paid at the full minimum wage for that time without the tip credit. The court decision is Fast v. Applebee's International, Inc., No. 10-1725 (8th Cir., April 21, 2011).
Robert Abell discussed this case on his Kentucky Employment Law Blog: Tip Credit Not Applicable to Bartenders and Servers Where More Than 20% of Work Is Performing Related But Nontipped Duties.
If you have questions about the tip credit, unpaid wages or overtime, contact Lexington, Kentucky wages and overtime lawyer Robert Abell at 859-254-7076.