Understanding The Laws Regarding Tipped Employees In Restaurants: How To Make Sure You're Getting All The Money You Deserve

21 October 2020 by Jonathan Phillips

When you're working as a tipped employee in a restaurant, you're operating under different labor laws compared to the restaurant's other employees. Unfortunately, some restaurants knowingly violate these laws in order to save money—margins are often thin in the restaurant business, and most employers don't believe that their employees will take legal action against them.

If you're a tipped employee in a restaurant, it's important to understand the laws that your employer must follow. You'll be able to protect yourself if your employer ever underpays you for your work. To understand more about the laws surrounding tipped employees and how an employer can violate them, read on.

How Does Minimum Wage for Tipped Employees Work?

Under the Fair Labor Standards Act, the current federal minimum wage for a tipped worked is $2.13 an hour. This is defined as anyone who makes over $30 a month in tips. This is substantially below the normal federal minimum wage of $7.25 an hour, but the idea behind it is that a tipped employee should receive enough money in tips in order to bring them above the federal minimum wage.

If you're below the untipped minimum wage for a pay period, your employer is required you to pay the difference on your paycheck in order to bring you above the minimum wage. Note that many states have their own laws regulating minimum wage for both tipped and untipped workers. If the state minimum wage is higher, then your employer is required to pay that amount instead. Your employer has the duty to ensure you're making at least the minimum wage regardless of how many tips are coming in.

Can an Employer Take Your Tips?

Your tips are considered to be your property when they're given to you by a customer, so your employer isn't allowed to simply take them. You're entitled to all of the tips that you receive while you're on the job. If an employer withholds your tips because customers didn't pay for their food (which is an unfortunate practice that some restaurants use), then they're likely in violation.

However, there are a few exceptions to this rule. When customers tip with a credit card, your employer has to pay a small service charge in order to process the card. They're allowed to reduce your tip by this amount.

Additionally, gratuity charges or service charges that are automatically applied to a customer's bill aren't considered to be tips either. They're not freely given to you by the customer, so it's considered to be income for your employer. Your employer is allowed to take the service charge instead of giving it to you.

Is Tip Pooling Allowed?

Some restaurants combine all the tips and share them among employees at the end of the night, and this is allowed as long as the tips are divvied up among tipped employees. Your employer can't force you to split your tips with the chef or the manager, for example, because these positions typically don't receive tips.

What Should You Do if You Think Your Employer Is Violating These Laws?

If you think that you're earning less than you deserve because your employer is withholding your tips, splitting them among untipped employees or not paying you extra money to ensure you're making at least your state's minimum wage, then you should contact an employment attorney in your area. Your employer may be in violation of federal or local labor laws. When an employer violates labor laws, you're allowed to file a lawsuit against them in order to recover the money that was withheld for you. In addition, you may receive extra money as a form of punitive damages if your employer was knowingly violating the law. By explaining your situation to an employment attorney, you'll have a better idea of whether or not a case is worth pursuing against your employer.

Share

Search