Is restaurant management putting their hand in your tip jar?


The restaurant industry is a breeding ground for wage theft. For many restaurant workers, such as servers and bartenders, the only way to earn a livable wage is through hard-earned tips.  While the federal minimum wage is $7.25 per hour, under the Fair Labor Standards Act (FLSA),
employers are permitted to take a “tip credit” and pay as low as $2.13 per hour to “tipped employees.”

For tipped employees whose employers are taking the tip credit and paying them lower than the full federal minimum wage, tips earned by those employees are theirs to keep unless the employer establishes a valid “tip pooling” system.  A valid tip pool can only include “front of the house” employees like bussers and hosts who regularly interact with customers.  Under the FLSA, an employer CANNOT require a tipped employee who is earning less than the full minimum wage to share his or her tips with non-tipped employees such as “back of the house” kitchen staff who do not regularly interact with customers.

So, can an employer who is NOT taking the tip credit and who IS paying tipped employees the full federal minimum wage require tipped employees to share their tips with non-tipped employees who would not otherwise be considered part of a valid tip pool because they do not regularly interact with customers? This question confused employees, employers and lawyers alike for many years. Last year, an amendment to the FLSA answered this question: Yes, employees who receive the full minimum wage can be required to share tips with back-of-house, non-tipped employees.

However, it is important for servers, bussers and bartenders to know that under no circumstances can their employers retain a portion of their tips for the owners or require them to share tips with management.  Employers who keep a portion of tips for “the house” or distribute them to managers violate the FLSA, even if the employer is not taking the tip credit. It is illegal for employers and management to share in employee tips.  In other words, a restaurant owner or manager is not allowed to put their hand in the tip jar.

If you are or were a tipped restaurant employee, you may be entitled to compensation for tips taken by the house.  Please call the Shavitz Law Group at (561) 447-8888 or email us at  info@shavitzlaw.com  to learn about your rights.