TIPS ABOUT TIPS: HOW TO MAKE SURE YOUR EMPLOYER ISN’T STEALING THEM FROM YOU


You Earned Your Tips!  However, there are many ways employers are cheating employees of their hard-earned money!

Many American restaurant workers know that the only way for them to earn a livable wage is through their hard-earned tips.  While the federal minimum wage is $7.25 per hour, under the Fair Labor Standards Act (FLSA) employers are permitted to pay as low as $2.13 per hour to employees who are considered “tipped employees.”  This applies to workers such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, parking valets and service bartenders.

Many high-profile establishments have found themselves paying out millions to settle unpaid wages cases, which are often related to unpaid tips and overtime. Wage theft is widespread in the restaurant industry from fast food to fine dining leaving low wage workers the most vulnerable.

WHY DOES WAGE THEFT HAPPEN SO FREQUENTLY?

Employers are only entitled to take this tip credit under certain circumstances.  Three ways in which employers violate the tip credit law include:

WHEN AN EMPLOYER TAKES A PORTION OF THE TIPPED EMPLOYEE’S TIPS 

Tips earned by an employee are his or hers to keep unless the employer establishes a valid “tip pooling” system to share tips amongst tipped employees.   But where many employers make mistakes and violate the law is when they “put their hand in the cookie jar” and the employer takes a portion of a tipped employee’s tips.

WHEN AN EMPLOYER GIVES A TIPPED EMPLOYEE’S TIPS TO NON-TIPPED EMPLOYEES

An employer cannot distribute a tipped employee’s tips to non-tipped employees.   For example, an employer cannot distribute a server’s tips to a cook.

WHEN AN EMPLOYER TAKES A TIP CREDIT FROM AN EMPLOYEE WHO SPENDS MORE THAN 20% OF THEIR TIME ON NON-TIPPED WORK

It is a violation of the law to have a tipped employee who is being paid less than the federal Minimum Wage and use that employee for duties that are unrelated to the ability to earn tips.  Thus, employers cannot have a server spending more than 20% of his or her time on work such as cleaning the restaurant before or after a shift because this takes the employee away from work where he or she can earn tips. 80% or more of a tipped employees’ work must give them the opportunity to earn tips.

SUMMARY

The most important TIP to take away is: if you worked as a tipped employee in the past 3 years and you believe your employer did not pay you the tips you were owed, we are here to help.  

If you work or worked as a tipped employee within the past 3 years, please contact us at info@shavitzlaw.com or (800) 616-4000 to discuss your experience.  We represent workers on a contingency basis meaning that our law firm only gets paid if we recover damages on your behalf.

The content of the article is for informational purposes only and does not contain legal or other advice and/or opinions. Shares and posts are not endorsements.