Owner of restaurant keeps tips

[marcella_04]

What is the name of your state (only U.S. law)? Florida
I work at an indian restaurant, and my indian boss pays his employees 7.00 an hour no matter your position.
Hostess/waiter/food runner/ buss boy, all receive 7 an hour, and all the tips the customers give, the owner keeps it.
is that legal?

 

[thedoctorisin]

From http://www.dol.gov/esa/whd/regs/compliance/whdfs15.pdf:

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.

 

[new1]

Consult with a lawyer and sue him for a large amount of cash. The owner will most likely settle outside of a court in order to save his time and money.

 

[marcella_04]

Well I know about the tips policy, I just want to know if a restaurant has the choice to either pay the employees a regular salary(like he does) or does he not have that choice?

 

[Ohiogal]

Well I know about the tips policy, I just want to know if a restaurant has the choice to either pay the employees a regular salary(like he does) or does he not have that choice?

You are griping about earning $7.00 an hour plus tips? He can pay you $7.00 an hour but you are still entitled to tips.

 

[marcella_04]

HOW DO I PROVE THAT!??

 

[eerelations]

Contact the federal DOL.

 

[ArmyRetCW3]

If and when the employer pays the applicable minimum wage, there is nothing illegal for the employer keeping the tips. He has in fact paid in compliance with the applicable federal law...

 

[HomeGuru]

What is the name of your state (only U.S. law)? Florida
I work at an indian restaurant, and my indian boss pays his employees 7.00 an hour no matter your position.
Hostess/waiter/food runner/ buss boy, all receive 7 an hour, and all the tips the customers give, the owner keeps it.
is that legal?

**A: yes it is under the recently passed indian giver law.

 

[justalayman]

If and when the employer pays the applicable minimum wage, there is nothing illegal for the employer keeping the tips. He has in fact paid in compliance with the applicable federal law...

You seem to be the resident authority on matters of this type but;

as written, the DOL does not appear to differentiate their statement concerning tips based upon the amount the employee is paid. It appears to be a blanket statement that simply requires all tips to be kept by the 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.

Not only that but the highlighted portion above states the employee still is to recieve the tips.

Do you have any supporting direction that would support your statement?

 

[ArmyRetCW3]

The tips belong to the employees, IF, the employee is paid the tip wages + tips. When the employer pays the applicable minimum wage, as is in this case, the employer is in federal law (FLSA) compliance.

Once the employer is in compliance, as in this case, then the employer can do as he wishes with the tips. The Supreme Court Kinghoffer ruling prevents the federal agency with enforcing the “tips belonging to the employee rule”.

 

[justalayman]

can you help a bit more?

I cannot find this Kinghoffer in any search I am using. Got a link?

my opinion of such a ruling is simply wrong. It refutes the fact that the tip itself is intended for the server as a gift from the patron. Taking such a tip from a server, in my mind, is nothing less than criminal. When I leave a tip, it is intended to go to the server, regardless what they are paid by the employer. The employer taking the tip is theft at a minimum and extortion at its greatest.

 

[ArmyRetCW3]

I am not a legal expert, however I will try to explain the Klinghoffer rule. Under federal rules the Labor Department-Wage Hour Div can only enforce the statutory minimum wage of section 6 of the FLSA and the regular rate of section 7 of the FLSA.

Klinghoffer is the individual that sue an employer demanding that the employer pay the agreed upon rate, above minimum wage in non over time workweek. The Labor Department-Wage Hour Div tried to assist Klinghoffer as a friend of the court or something like that. The court ruling came down that the Labor Department-Wage Hour Div had not authority to enforce a rate higher than section 6 (minimum wage) of the FLSA. However, in over time weeks the Labor Department-Wage Hour Div can enforce the regular rate (whatever rate the employer is paying for that particular week that over time was worked).

The explanation above is not exact but the result is the same, in non-over time workweek Labor Department-Wage Hour Div can only enforce the applicable minimum wage.

In this situation here, I agreed that the tips belong to the employee, however, that fact that the employer pays above the applicable minimum wage, there is no enforcement authority under Labor Department-Wage Hour Div rules that can make the employer return the tips to the employee. Maybe state or local law but not federal.

 

[justalayman]

You dissapointed me. You generally have the answers.

It doesn't appear to have been raised to the scrutiny of the SCOTUS but here is the ruling.
United States of America, Appellee, v. Klinghoffer Bros. Realty Corp., Irving Jacobson and Albertklinghoffer, Defendants-appellants - 285 F.2d 487 - Justia US Court of Appeals Cases and Opinions

It is not a matter of paying the minimum wage or not. It is a matter of the tips, in nothing I have read, can ever be claimed by the employer. Everything the DOL publishes states specifically tips cannot be taken by the employer and must be retained by the employee unless they become part of a tip sharing pool. It is outside of the minimum wage situation as I see it. The Klinghoffer case was very different.

I do understand your statement that the DOL cannot enforce anything above the minimum wage (maybe that is something that needs to change after all, employment is a contract between the two parties and each party should be held accountable to their agreement)

I am not sure who or how it would be enforced but the simple fact is, regardles of how much an employee is paid, the tips are still the property of the employee. Since the general publications of the DOL give this direction, I would suggest there is something within their authority to control this situation but I am not aware of anything specific.

Since Florida does not have a state DOL, I believe the OP may be relegated to self help through the courts.

 

[>Charlotte<]

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
(Revised July 2008)

Requirements
If an employer elects to use the tip credit provision the employer must 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.

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.
____________________________________________________________

As an interesting note, if a tip is charged to a credit card the employer may withhold a percentage of the tip comparable to the percentage he pays the credit card company--as long as it does not reduce the employee's wage below the required minimum. That's a good reason to leave tips in cash.