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Employer keeping all tips

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Frylock

Junior Member
This is about something happening to someone in Alabama.

He works for a country club, where he serves at tables. On each bill he hands out, there is a mandatory 18 percent gratuity. Customers also often volunteer him a further tip.

However, his employer keeps all the money that the customers pay--the employer keeps the 18 percent, and the employer keeps any additional tip the customer signs for on his bill.

The employer has forbidden this employee from telling the customers about this practice.

So the customers believe they are tipping the employee, when in fact they are just handing the employer extra money.

I am wondering

--Is the employer comitting fraud?
--does the employee count as a "tipped employee" for legal purposes?
--does the employee have a claim on the money the employer has been pocketing?

-Kris
 


C

CheeseBlotto

Guest
I suspect that the state's Department of Labor would be very intrested in hearing about this.
 

xylene

Senior Member
Is this persons wages greater than minimum wage?

If no, then the employer needs to do so.

If yes, then this employer is a disreputable scumbag, who from an ethical standpoint is cheating his employees AND customers... but is most likely doing nothing wrong from a legal standpoint.

Is the employer comitting fraud?
No. Its lame, but it is not fraud. I would quit this job in disgust, or at least tell customers not to tip me extra until I got fired.

Does the employee count as a "tipped employee" for legal purposes?
For what legal purposes? A "tipped" employee is allowed to be paid a LOWER base wage, so long as the addition of tips brings the wages to the minimum level... IS THIS PERSON PAID TO THE STATE MINIMUM WAGE? That is the key question.

--does the employee have a claim on the money the employer has been pocketing?
The employer is not 'pocketing' the gratuity in some illegal way.

It seems despicable... but then again those gratuity charges could be paying the dishwasher...
 
C

CheeseBlotto

Guest
There are laws in a number of states that specifically state that tips must be given to employees and under no circumstance can be kept by the employer. Not sure about Abalama.
 

xylene

Senior Member
CheeseBlotto said:
There are laws in a number of states that specifically state that tips must be given to employees and under no circumstance can be kept by the employer. Not sure about Abalama.
Doesn't seem so.

However Section 25-3-4 of Alabama law does afford then authorities the right to investigate controvesies in the payment of wages.

Could be a start, because this is lame.

10 Bucks says it is a certain wel advertised chain...
 

tkilburn

Member
According to the Alabama DOL, they don't have any wage and hour laws specific to their state. They default to the US DOL.

On the DOL webiste under tips, this is one of rules:

3) Allow the tipped employee to retain all tips, whether or not the employer elects to take a tip credit for tips received, except to the extent the employee participates in a valid tip pooling arrangement.

and...

Retention of Tips: The law forbids any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. A tip is the sole property of the tipped employee. Where an employer does not strictly observe the tip credit provisions of the Act, no tip credit may be claimed and the employees are entitled to receive the full cash minimum wage, in addition to retaining tips they may\should have received.

Service Charges: A compulsory charge for service, for example, 15 percent of the bill, is not a tip. Such charges are part of the employer's gross receipts. Where service charges are imposed and the employee receives no tips, the employer must pay the entire minimum wage and overtime required by the Act.





So it would seem to me, unless, the OP is mistaking a service charge as gratuity, the employer in question is in violation.

Just my opinion,
Tracy
 
Last edited:

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