Federal and state statutes establish key baselines for employee wages. Generally speaking, businesses have to pay at least a minimum hourly wage. However, those in service-based professions where they receive gratuities often work for far less than the traditional minimum wage. There is a separate, lower minimum wage for those in tipped positions.
Service professionals largely rely on the tips provided by their customers to support themselves, as their paychecks often have little left over after income tax contributions. Service-based jobs offer an opportunity to make more by working harder.
Those who provide exceptional service may make relatively competitive wages if they work at the right restaurant. Unfortunately, not all service workers get to retain the tips that customers leave them. Some businesses force workers to pool their tips with other people. Can employers legally require that tipped employees share their gratuities?
Tip pooling is legal with the right practices
Federal statutes allow for tip pooling. Under the Fair Labor Standards Act (FLSA), employers can require that workers combine their tips so that everyone receives an equal portion of the overall tips for a specific shift. Employers can also require that workers who directly serve customers share their tips with coworkers who provide support services, such as bussers, hosts and bartenders.
State statutes do not expand on those protections, so the federal rule is the one that applies. While tip pooling is potentially legal, there are strict limitations on tip pooling practices to prevent abusive employer conduct. Generally speaking, only those involved in the service in some way can receive tips.
Those paid higher wages, such as cooks in the kitchen, generally have no right to a portion of pooled tips. More importantly, owners and managers paid on a salary basis should not receive pooled tips. If the manager running the restaurant demands a portion of the gratuities left for the workers, their conduct may violate the law. Even if they assist with service, their salary pay makes their participation in the tip pool inappropriate and illegal.
Workers dealing with violations of their right to fair wages because of inappropriate tip-pooling practices may need help. Fighting back against illegal pay practices can be difficult but may ultimately benefit workers who have been denied the gratuities they earned through their hard work.
