Tip Pooling

Are you entitled tips or service charges?

If you work in the service industry and have ever felt like your employer is illegally keeping tips from you, you may be right. Wage-related rules for tipped employees, such as those working as bartenders or valets who receive money from satisfied customers, are governed by the Fair Labor Standards Act (FLSA). Although the FLSA allows for tip pooling arrangements, employers must notify tipped employees of any tip pool contribution requirements and are prohibited from retaining tips for any other purpose. Every employer requiring workers to participate in tip pooling must be careful to observe the legal rights of employees. While it is true that employers have the right to require workers to pay into a tip pool, they may not do so in ways that violate an employee’s legal rights. Knowing these rights can go a long way for employees such as waitresses, bartenders, cleaning staff and others who deal with tips on a daily basis.

Tip Pooling and the Law

The law outlines certain regulations regarding tip pooling. For instance, an employer must never require that the portion paid into the tip pool be more than a customary and reasonable share. Additionally, all tip pooling arrangements must be valid according to law. This is because, generally, all tips should belong to the employee who earns them – not the employer. However, with a valid tip pooling arrangement in place, the employer may pool and distribute employees’ tips, but must observe the legal guidelines for doing so.

One of the main legal guidelines for tip pooling is that employers must not be allowed to be a part of the tip pool. Some states also prohibit managers and supervisor from being included in tip pools as well. Also, employees who do not usually receive tips as part of their compensation cannot be placed in the tip pool. If employers or non-tip earners are included in the tip pool, this could invalidate the tip pool arrangement and violate the rights of tip earners.

Getting Help with Your Tip Pooling Case

The tips an employee earns are a precious source of income. Service workers who rely on tips should be aware that there are legal rights designed to protect tips and to ensure that employers correctly distribute both wages and money earned from tips. To get help with your tip pooling case, contact the experienced attorneys at Yoon Law, APC. Our excellent team of attorneys, well-versed in employment law, is standing by to answer your questions and provide the sound legal advice you need today.