In the restaurant and hospitality industry it is common practice for customers to give tips to those who have been serving them, particularly if they are happy with the service they have received.
Generally, it is illegal for a manager to take a worker’s tips as they belong to the employee. The Fair Labor Standards Act (FLSA) controls rules for tipped employees like bartenders, restaurant servers and valets and anybody else who receives tips from satisfied customers.
According to the FLSA, tips are the sole property of the employee who has been tipped.
What Are Examples of Tip Theft?
For many restaurant workers, tips may make up much of their wages. Tips belong to the restaurant workers quite legally and not the restaurant owners. Federal law imposes a ban on restaurant owners withholding tips. This is called tip skimming. Sometimes, restaurant workers lose their tips when the owners distribute them amongst employees who were not the recipients of the tips.
However there are tip credits that need to be considered too. These allow an employer to pay any tipped worker lower than the minimum wage as long as the tips bring up their earnings to that minimum wage amount.
Every time a pay day comes around, the employer can use tip credits. The FLSA won’t allow any arrangement to take place between the employer and the tipped employee where the employer can keep a tip.
For example, even if a tipped employee gets at least $7.25 per hour as wages from the employer, the employee can't be made to hand over any tips to his/her employer.
If an employer withholds tips and the worker is not taking home the minimum wage once the tips have been removed this is wage theft.
Tip pooling takes place typically in the food industry, but the employer has to provide notice to tipped employees if the pooling of tips is to take place.
However, tip pools shouldn’t include any employees who don’t get tipped, such as chefs, dishwashers and cooks.
Examples of Employer Tip Theft
Employer tip theft is very common. Some examples of employer tip theft are things like:
- Taking tips that were left for an employee.
- Stealing tips from a tip jar.
- Withholding tips from employees.
- Illegal tip pooling practices, like forcing employees to pool tips to share tips with non-tipped employees.
- Forcing employees to give all or some of their tips to the employer.
- Not giving employees tips from credit cards.
If you are a tipped employee and your employer is engaging in tip theft you have the right to file a complaint against your employer. Tip theft is a type of wage theft and it’s against the law.
If your employer is stealing your tips or taking your tips it’s important that you have evidence showing how much money you are making in tips. When you get tipped you should keep a record of how much are you tipped. Write down the date and time as well as how much you received as a tip. If you can, take a photo of the tip with your phone so you have proof of cash tips. And keep copies of credit card receipt tips so that you have a record of those as well.
If your employer is withholding your tips and not making up the difference between your tips and minimum wage on your paycheck then you may be owed damages for the tips that were taken by the employer and for pay that you are owed.
Can an Employer Withhold Tips?
According to the landmark Fair Labor Standards Act (FLSA), employers must compensate workers on time and at full pay. The law describes the penalties employers face for tip theft.
How does the FLSA address the tips earned by workers? Can an employer withhold tips? The answer is no except for a couple of valid reasons. Defining what constitutes withholding tips causes some confusion.
According to state and federal laws, employers in the industries where workers earn tips can put all credit card tips on worker paychecks.
The key is to receive full compensation in the form of tip income. Employers can not deduct any tip income from employee paychecks.
Employers not only can directly steal tips, but they can also indirectly steal tips by lowering a tipped worker’s hourly rate of pay.
Every state has established a minimum wage for tipped and non-tipped workers. The most effective way to fight back against the theft of tips is to keep meticulous records that demonstrate your employer has violated the FLSA.
However, you have to be careful when claiming your employer stole your tips. Many restaurants create pools that involve the tips generated by workers.
Tips go into a pool that a manager divides equally after the end of each shift. Another way an employer has the legal right to withhold tips concerns the tipping out of support employees, such as cooks and busboys.
If you believe your employer has stolen some of your tip income, contact a wage theft attorney to determine how to proceed with your case. Your legal counsel might recommend filing a complaint with the Equal Employment Opportunity Commission (EEOC).
What Can I Do If My Tips Are Being Stolen?
If your tips are being stolen at work. See if your co-workers are experiencing the same thing. It is likely that you are not the only one who’s tips are being stolen.
If you find out that there are other employees whose tips are being stolen as well, you should address the matter with your boss as a team. If your boss has to confront a group of angry workers, your boss could look to resolve the issue without you having to bring this issue in a lawsuit.
If you don’t think you are getting your fair share of the tips you should do the following:
- Tell your employer as soon as you know and ask him/her to pay what’s owed.
- Keep records of your tips as by doing that you will know that the tip mistakes are deliberate if you don’t get your fair share.
- File a complaint Wages and Hour Division (WHD) of the U.S. Department of Labor. It is this body which is expected to enforce the federal Fair Labor Standards Act (FLSA).
- Find out from co workers if they too are having their tips stolen.
Can Employers Take Tips from Employees?
If you work in a job where you get tips, like a waiter or waitress and your boss is stealing your tips, you may want to file an employment law claim against your employer.
Employees who earn tips are entitled to keep theirs unless their employer has an established “tip pool”. Tip pooling is when all tipped employees contribute some portion of their tips into a pool.
That pool is then divided evenly among a group of employees. If your employer does not have an established tip pool, then your company may have violated both state and federal wage theft laws if your tips are being stolen by your boss.
If your boss has stolen your tips, you need to make sure you gather as much evidence as possible. See if there were any witnesses, if your work has a security system, see if there is video proof that tip theft.
If your company has an HR Department, you should make sure you file your complaint with them as well. Be sure to remember all the details related to your tip theft.
If the issue is not resolved with your employer’s HR department, you may want to file a wage theft claim against your employer. Some states have their own governing agency that investigate wage theft claims in that state.
You can also file a wage theft claim with the Wages and Hour Division (WHD) of the U.S. Department of Labor. If you work with an employment law attorney, your attorney can help make sure that all of your paperwork is in order and can help you file your claim with state/federal departments.
What Steps Can I Take if I Think My Tips on My Paycheck Are Being Shorted?
When you find that your paycheck doesn’t add up to the amount you have earned in tips, there are certain things you can do to get that difference paid and that is:
- Tell your boss about it.
- Keep a good record of your tips.
- Gather the evidence to prove your paycheck has been shorted.
- File a wage theft claim with WHD.
How a Lawyer Can Help When My Tips Are Stolen?
If your tips are being stolen you want to sort out the matter as soon as possible and this is when an employment lawyer can step in and help you get the tip mount that is owed to you restored. Your lawyer knows how to file WHDs claims and not long after the claim has been fired you will see a result and get back what you are owed.
An employment law attorney can help make sure that you have all that you need in terms of paperwork, eyewitness statements, evidence before filing a wage theft claim with your local or federal agencies.
An employment law attorney can also advice you where you should file your claim. If your tips are being stolen at work, your attorney can help you get damages from your wage theft claim.
Damages include lost wages, as well as compensatory and punitive damages. If you win your wage theft claim against your employer, your employer may have to also pay your legal fees as well. Get a free case evaluation today.
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