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Tipped Employees and Tip Pooling

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In the United States, there are plenty of workers whose wages are based on or supplemented by tips. In some circumstances, tips are even considered to be already calculated into an employee’s compensation, which is often the case for waiters and waitresses. The Fair Labor Standards Act allows an employer to take what is known as a “tip credit,” which is a credit toward the employer’s obligation to pay an employee minimum wage to determine what the total compensation would be for a tipped employee.

If you are a tipped employee and you feel that you are being wrongfully reimbursed for your tips or your wages are significantly lower than minimum standards, then it is important that you contact an attorney from Riggan Law Firm, LLC as soon as possible.

Tip Pooling / Sharing

Servers and bartenders rely heavily on tips to ensure that they receive decent wages. Although employers are required to allow employees to retain the tips that they earn, there is one exception to this rule known as tip pooling. In a tip pool, employees will pool or share some or all of their earned tips. This is only considered legal as long as the employees involved in the tipping pool are paid at least minimum wage, and the tips are not shared with managers or employees that do not interact with the customers, such as cooks and dishwashers.

Important Information for Tipped Employees

For an employee to take advantage of a tip credit, the employer must first ensure that the employee is well aware of the rules and regulations surrounding tipped employees.

By either written statement or verbal statement, an employer must let a tipped employee know:

  • The tip credit that the employer may claim cannot exceed the amount of tips that the employee receives
  • The amount of cash wage that an employee receives is required to be at least $2.13 per hour according to federal laws
  • The total amount of tip credit that an employer can retain as tip credit cannot exceed the difference between $2.13 and the minimum wage of $7.30, which is $5.12

Common wage violations are often made against tipped employees by their employers. In some cases, the employer may try to claim that the employee is only compensated with tips and not minimum wages, or the employer simply fails to pay overtime to a tipped employee.

If you feel that you were wronged in a tip pooling situation or denied tips and wages as a tipped employee, you may have a claim for unpaid wages against your employer Do not hesitate to contact an attorney from Riggan Law Firm, LLC as soon as possible and retain the legal representation that you deserve.

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