Tips are the property of the employee, generally. Servers, bartenders, and others who regularly and customarily receive tips can actually get paid less than minimum wage – $3.02 per hour less than minimum wage to be exact. Payment in this way is called the “tip credit”. But, there are a lot of technicalities involved when your employer pays tipped employees less than minimum wage. If an employer fails in any one area, then the “tip credit” taken could be invalid, and the tipped employee(s) could be entitled to keep the tips and then receive up to the $3.02 per hour that was deducted from their wage.
In order for an employer to get the “tip credit”, employees must be told in advance and they must to receive at least $30.00 per month in tips. Also, the $3.02 per hour that was not paid by the employer must be received in tips so that the tipped employee’s wages are above the hourly minimum wage (now $7.67/hour).
Problems often arise when employers have a “tip pool” and start having managers, cooks, and other employees sharing in the tips when they should not. These type of violations could cause the entire “tip pool” to be invalid, which can then result in the employer having to pay back to the employees them amounts that each person contributed to the “tip pool” and possibly more.
Tipped employees have rights, and when they band together against an employer, they can not only make a difference, but they can get back the money they earned!
For each violation of the law, there also is the possibility that the employee will recover double damages, plus his/her attorneys’ fees and costs. If you suspect a tip credit problem or tip pool violation, please don’t hesitate to contact me.
At the FairLaw Firm, we know and understand these complicated laws.
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