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What are tipped employees’ rights?

As an employer of tipped workers, you may be confused about where the law stands and what rights your employees have in regard to pay. If you accidentally fail to abide by the law, you might find yourself in the middle of a costly lawsuit; therefore, it's a good idea to exercise prevention.

Tipped employees are recognized under the law as any employee that receives over $30 in tips per month on a regular basis. This means that a worker on any salary could be classed as a tipped employee if he or she receives just a small amount of regular tips.

If an employee receives a high amount of tips, does this mean that I can pay him or her less?

All tipped employees are subject to a minimum wage under the Fair Labor Standards Act (FLSA). This law states that employers must directly pay their workers a wage of at least $2.13. However, if this is to be the case, it must be established that the worker is making enough tips each hour to match the national minimum wage that is currently set to $7.25. It is important to always ensure that your employees receive minimum wage after their tips have been counted.

Can tips be pooled?

Tips are allowed to be pooled under the FLSA. However, workers may object to pooling their tips with chefs or employees that do not have direct interaction with customers.

If you have any questions about the rights of your tipped workers, an attorney can help you understand the applicable laws and your legal options.

Source: FindLaw, "Tipped Employees Under the FLSA," accessed April 12, 2018

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