Sharing Tips and Tip Pooling: Tip and Wage Theft for Restaurant Employees
Employees who work for tips are often taken advantage of by customers who fail to provide proper compensation for the service they’ve received. But what is even worse is when these hard-working employees are taken advantage of by their own employers.
It happens all the time, all throughout Florida and Georgia.
One of the most common ways that employers commit wage theft against tipped employees is when they set up improper tip pooling and tip sharing arrangements. They may establish these arrangements out of ignorance of the law, rather than a deliberate intent to cheat employees. But regardless of the reason, employees who have lost compensation are entitled to seek relief.
The Leach Firm, P.A. fights for justice and fair treatment for employees. We can help you get compensation for past wage theft and ensure that you are not subject to illegal practices in the future.
Managers and Supervisors Cannot Keep a Share of the Tips
To a certain degree, employers are allowed to pool tips that servers receive and divide them up. However, federal law puts serious restrictions on how these tips may be distributed.
Employers can track tip credit for purposes of minimum wage and overtime laws, but the employer cannot actually keep any of the tip money. That money belongs to the employees.
Managers and supervisors are considered agents of the employer, so they are not allowed to keep tip money. For purpose of this law, someone is considered a manager or supervisor if they:
- Regularly direct the work of at least two employees
- Have a primary duty of managing the enterprise or a department of the enterprise
- Have the authority to hire and fire employees (or make valued recommendations about hiring and firing)
In addition, business owners with at least 20% equity in the business and actively engaged in management also cannot take a share of employee tips. If a manager or supervisor serves customers entirely on their own, they may keep tips received from those particular customers, but they cannot take a share of the tip pool.
Other Tip Pool Rules
Generally, employers are allowed to use two types of tip pooling arrangements. They can require tipped employees to contribute a certain amount to a traditional pool that is divided among employees in positions where workers customarily receive tips such as waiters, bartenders, counter workers, bussers, and bellhops. Workers who don’t customarily receive tips, such as dishwashers and cooks, are not supposed to receive a share of this tip pool.
On the other hand, if the employer pays all employees the minimum wage or higher, they can establish a nontraditional tip pool where tips are shared among all employees. Supervisors and managers, however, may not receive a share.
When employers collect tips to share them among employees, they must distribute the tips promptly, generally by the payday for the period when the workweek ends, even if they have not yet received the money from a credit card company.
Minimum Pay from Pooled Tips
Employers are required to ensure that their employees receive pay that at least equals minimum wage, and that they receive overtime pay if they work overtime hours. They can pay a special base rate less than minimum wage, but must show that employees have actually received enough in tip money to equal the applicable minimum wage.
For instance, in Florida the maximum tip credit is $3.02. When the minimum wage is $11 per hour, employers must pay tipped employees at least $7.98 per hour and if they cannot prove that an employee has received tips equaling at least $3.02 per hour, they must make up the difference. In addition, if they ask tipped employees to perform non-tipped jobs, employers are supposed to pay the higher minimum wage, not the lower tipped minimum wage.
Protect Yourself from Wage Theft
When you work hard, you deserve to receive all the pay that is due. If your employer is taking a share, not paying the right amount, or giving your tips to the wrong employees, you are entitled to receive back pay.
The experienced wage theft lawyers at The Leach Firm, P.A. are ready to fight to get the compensation you deserve and help you protect yourself and others going forward. For a free consultation and case evaluation, contact us today.
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Why am I being paid less than minimum wage?
For the most part, workers must be paid a wage that complies with both federal and Florida minimum wage standards. However, there are some job exceptions to the minimum wage requirement, including:
- Independent contractors
- Tipped employees (e.g., restaurant servers)
- Young workers
- Student workers
- Farm workers
Unless an employee falls under an exception, they must receive minimum wage.
What are the laws concerning employees who receive tips?
Under the law, tipped employees may receive less than minimum wage so long as they receive enough tips to make up the difference.
- Tip credits: Tip credits allow employers to "credit" the employees' tips toward satisfying the minimum wage requirements. However, when an employee is performing non-tipped tasks unrelated to tipped duties, the employer may not claim a tip credit for those hours.
- Tip Pooling: Employers are allowed to pool employees' tips and share them among all employees. By law, employers are not permitted to keep any portion of the gratuity from the tip pool.
What can I do if my employer is breaking the overtime or minimum wage laws?
If your employer is violating federal or state wage laws, you can file a complaint with the U.S. Department of Labor or file a lawsuit to seek compensation. Employees usually find it helpful to work with a dedicated wage attorney who can protect their rights and help take advantage of all available remedies.
Recover Your Lost Wages with the Help of a Skilled Florida and Georgia Employment Law Attorney
When your employer has treated you unfairly, either through wage theft, unlawful discrimination, or other practices, you can count on the experienced attorneys at The Leach Firm, P.A. to fight for your rights. Contact us to schedule a free comprehensive consultation in English or Spanish.