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Is tip sharing illegal?

When you are working in a bar or restaurant, the tips that you make from high quality customer service are likely to be what you depend on in order to pay your rent. Therefore, you will put a lot of effort into ensuring that your customers have a great experience. But when your hard-earned tips are being pooled and shared with other members of staff, you might feel like you have been short-changed. Here's a short overview of the legalities of tip pooling and what you can do about it.

When tip-sharing is legal?

The federal laws state that it is permissible for tips to be pooled and shared; however, this is only true under certain specific circumstances. Anyone that benefits from the sharing of tips must be an employee that works directly with customers. This includes bartenders, servers and waiters and waitresses.

When is tip sharing illegal?

If these tips are shared with employees that do not deal with customers directly, then this constitutes illegal tip sharing. This is the case if the tips are being shared with chefs, managers or dishwashers. It is effectively stealing the hard-earned wages of the employees that are dealing with the customer directly, and it could mean that they are denied of their minimum wage.

Taking action

If you think that you have been a victim of illegal tip sharing, then you should remember your rights when it comes to the law. You might be able to receive compensation for the wages you have lost over the time you worked for the company.

Source: Class Action, "Illegal Tip Pooling," accessed Nov. 17, 2017

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