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Is your employer allowed to restrict you from tips earned?

On Behalf of | Oct 14, 2020 | Blog |

You work in an environment where you’re expected to receive tips. You’ve always made good money, but something that has frustrated you is how other workers sometimes slack off but still get a share in your tips.

You spoke with your employer about it, and they decided to give you a promotion. As a result of the dollar-an-hour raise they gave you, they let you know that you won’t be in the tip pool anymore. Is that fair? You’re still doing a job where you’re tipped, but now you can’t keep it.

Did you know that your employer can legally require you to participate in a tip tool?

In the first situation, your employer was legally allowed to create a tip pool. Tip pools can be helpful for workers when there are a limited number of tables or when there is a slow night. Tips pools help reduce the risk of missing out on quicker tables while you work on a larger one or ending up with fewer tips because of one or two patrons not leaving any.

However, in the second scenario, your employer could be in the wrong. Federal law states that employers cannot keep any tips that are placed into a tip pool, even if those are for managers or supervisors. If you are being paid less than minimum wage, then you should be getting tips. If you’re working in a tipped position, it’s likely that you should be receiving them as well.

However, if you signed a contract to be on salary at a higher rate than others, then you may no longer be a tipped employee. Everything in this scenario comes down to the new contract.

If you have concerns, it’s a good idea to talk to your employer about wanting to accept tips and to have an explanation about why you’re not getting them when you’re doing a similar job to others. Your employer may be able to use your tips as credit toward a minimum wage obligation, but otherwise, this is a complex situation that may require a second look by you, your attorney and your boss.