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Employers keeping tips

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NatashaHarringt

Junior Member
What is the name of your state? Washington

I am wondering if there are specific federal or state laws regarding employers keeping tips intended for servers.
 


NatashaHarringt

Junior Member
I am paid over minimum wage, but in Washington state the law requires that tipped employees be paid at least minimum wage before tips.
 

TinkerBelleLuvr

Senior Member
There is no circumstance where it is legal for an employer to keep tips.
not complete true. If the tips are on a CC, the employer can retain back 3% of the tip to cover the discount the CC company will charge him.
Example:
The tip is $20. The CC company will charge $0.60. The net deposit will be $19.40. If the employee is part of a tip sharing pool (bartender, host/hostess/maitre de, busboy), then those come out too and are distributed according to the percentages determined for that group.
 

pattytx

Senior Member
not complete true. If the tips are on a CC, the employer can retain back 3% of the tip to cover the discount the CC company will charge him.
Well, that isn't completely true either. It's not a fixed percentage; it's whatever the credit card company charges, but it can never be more than that.

And to be clear, OP, this are tips and not service charges?
 

whatehva

Member
my understanding--and i may be wrong--is that pooled tips do go to the owners or whoever. You make more than minimum wage, which is where the tips would go to (if you made less than minimum wage).

I say, go find a restaurant where you can make your own tips.
 

pattytx

Senior Member
my understanding--and i may be wrong--is that pooled tips do go to the owners or whoever. You make more than minimum wage, which is where the tips would go to (if you made less than minimum wage).
Your understanding, although theoretically correct to some extent, is practically and legally incorrect. Pooled tips are to be distributed completely. The "owners" (or managers, or whomever) are merely a distribution method. Tips, ANY of them, do NOT belong to the owners, and owners/managers cannot legally participate in a tip pool. Doesn't make any difference whether the employee is making minimum wage or not.
http://www.dol.gov/dol/topic/wages/wagestips.htm
 

overtimelawyers

Junior Member
Tip pooling the wrong way

LeeHarvey is correct.
"tip pooling" is when a restaurant requires tipped employees to contribute a portion of their tips into a pool which is then split among other employees is legal under the federal Fair Labor Standards Act's tip-credit provisions. The tip-credit provisions has several limitations that will render the tip pool invalid if they are violated; exposing the employer to minimum wage violations.

The employer can not keep tips intended for the servers. It's wrong for several reasons:
1) Stay out of the Pool! Tipped employees such as waiters cannot be required to share their tips with workers who do not customarily and regularly receive tips. The employer do not "customarily and regularly" receive tips and their participation in tip-pooling arrangements are a clear violation of overtime laws;
2) no tip credit the tip credit provisions basically provides that if an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the minimum hourly wage of $5.85 per hour effective July 24, 2007 (previously $5.15); $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009; the employer must make up the difference.

By taking tips from wait staff so that the hourly wage drops below minimum wage, the employer forfeits forfeit their tip credit and are required to pay the waiters minimum wage for each and every hour that that the waiters worked over the last two and possibly three years. In addition, the waiters are entitled to keep the tips they may or should have received.

3) Plastic accepted...most of the time Credit Card charges by the employer was discussed in this thread. Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, then the employer may pay the employee the tip, less that percentage. This charge on the tip may not reduce the employee's wage below the required minimum wage. [see point 2)]

The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.

Cheers!
 

fairisfair

Senior Member
LeeHarvey is correct.
"tip pooling" is when a restaurant requires tipped employees to contribute a portion of their tips into a pool which is then split among other employees is legal under the federal Fair Labor Standards Act's tip-credit provisions. The tip-credit provisions has several limitations that will render the tip pool invalid if they are violated; exposing the employer to minimum wage violations.

The employer can not keep tips intended for the servers. It's wrong for several reasons:
1) Stay out of the Pool! Tipped employees such as waiters cannot be required to share their tips with workers who do not customarily and regularly receive tips. The employer do not "customarily and regularly" receive tips and their participation in tip-pooling arrangements are a clear violation of overtime laws;
2) no tip credit the tip credit provisions basically provides that if an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the minimum hourly wage of $5.85 per hour effective July 24, 2007 (previously $5.15); $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009; the employer must make up the difference.

By taking tips from wait staff so that the hourly wage drops below minimum wage, the employer forfeits forfeit their tip credit and are required to pay the waiters minimum wage for each and every hour that that the waiters worked over the last two and possibly three years. In addition, the waiters are entitled to keep the tips they may or should have received.

3) Plastic accepted...most of the time Credit Card charges by the employer was discussed in this thread. Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, then the employer may pay the employee the tip, less that percentage. This charge on the tip may not reduce the employee's wage below the required minimum wage. [see point 2)]

The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.

Cheers!
Your signon indicates that you are an attorney. Can you please share your state and specialty???
 

overtimelawyers

Junior Member
Lone Star State

My employment law practice is located in Houston, Texas. We focus on individual and collective actions invovling overtime and minimum wage violations.
 

moburkes

Senior Member
To the last poster: Understand that all of your posts with advertising are being removed. If you'd like to advertise, please contact the site administrator and pay the appropriate fees.

But, Welcome!!!!!!!!
 

moburkes

Senior Member
He already fixed his signature.
It wasn't part of his signature. I was going to send a PM, but it wasn't available. Prior to posting, I deleted 2 of his posts that had the links on them. That's how I know that he wrote them as part of his posts, and they weren't in his signature line.
 

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