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I’m Paid (Mostly) By Tips. That Could Be A Problem Under The Fair Labor Standards Act.

Posted by Andrew Weiner | Jun 12, 2020 | 0 Comments

Do you work in a restaurant?  Are you a waiter, waitress, bellhop, counter personnel who serves customers, busser, or service bartender?  Do you work somewhere else where you receive tips?

If so, in some circumstances the Fair Labor Standards Act requires that your employer compensate you in certain required ways:

Tip Credit: Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. So, your employer must pay you at least $2.13 per hour, before accounting for any tips, and it may violate the FLSA if it does not do so.

Tip Pool Requirements:  Tips received by an employee are property of that employee, but they may be used as part of a valid tip pool or tip sharing arrangement.  In order to be part of a pool or a sharing arrangement, the pool/sharing arrangement can only be among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors.  If an employer is including ineligible employees in a tip pool, then that tip pool may be illegal and you may be entitled to the compensation you were denied.

There are several additional requirements under the FLSA with respect to tips received by employees.  If you believe that your employer may be violating the FLSA with respect to your tips, please contact an FLSA lawyer at Weiner & Sand LLC to discuss your rights to compensation.

About the Author

Andrew Weiner

Andrew Weiner has represented and counseled clients in numerous areas of employment law, including race, gender, national origin, age, and disability discrimination claims, wage and hour disputes, retaliation and harassment claims, Fair Credit Reporting Act (background report) claims, common law tort claims, the development and implementation of employment contracts, employee handbooks, personnel policies, reductions-in-force, independent contractor agreements and compliance with Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and other federal, state and local employment statutes. Andrew also has negotiated severance agreements, employment contracts, non-compete agreements, and confidentiality agreements.


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