Working as a tipped employee has its perks, but dealing with a tip pool can be extremely challenging. Tip pools are not always handled in the most professional manner, either because employers aren’t aware of the proper protocol or they simply chose to ignore the rules in favor of their own system. When tips are gathered together and distributed unfairly, it can result in major issues, including loss of wages.
If you think you may be the victim of tip pool violations, find out how to identify the issue and discover what you can do to protect your rights.
Wage Requirements for Tipped Employees
As a rule, all workers must be paid the federal minimum wage, unless those employees are tipped. According to the Fair Labor Standards Act, employees are legally allowed to pay their employees less than minimum wage if the employees receive tips from customers in return for the service they provide. Some examples of tipped employees include restaurant servers, bellhops, bartenders, and furniture movers.
When an employee is paid less than minimum wage because he or she receives tips, it goes without saying that those tips become a substantial portion of that individual’s income. Therefore, how the tips are distributed has a major bearing on the employee’s ability to make a fair living. In order to make sure you receive your fair portion of tips, make sure you know how they ought to be distributed.
How Should Tips Be Distributed?
In many restaurants, hotels, and other workplaces where tipping is common, tips may be pooled so that they can be redistributed among the applicable employees. However, in this situation, not all employees may be legally eligible to receive a portion of the tips. According to the current wage laws, the tip pool should only be shared with employees who have direct interaction with the customers. Other employees who do not face the customers are not eligible to receive tips, and if they are tipped, their share takes away from the portion client-facing employees have fairly earned.
Know Your Rights
Tipping violations may seem minor, but they can drastically affect the income of employees who rely on tips as their main source of income. In addition to unfair tip distribution, employers can commit other tip violations that could impact employees. Employers are not allowed to use tips to bring their employee’s overall earnings up to minimum wage, nor can they distribute tips to themselves or any other employees in managing roles.
If your employer violates the wage laws regarding tip pools in any way, you may have need of an employment law attorney.
For help with your case, contact Shellist Lazarz Slobin LLP to discuss your situation with our Houston employment law attorneys.