Disputes about wages are among the leading causes of employee lawsuits. When companies do not pay workers minimum wage, deny them overtime or try to manipulate timeclock records to diminish payroll expenses, workers can take legal action.
Some wage violations are very obvious. Others can be harder to evaluate. For those who work in restaurants as servers, traditional minimum wage rules do not apply. They receive a reduced hourly minimum wage because they can expect to receive gratuities from the customers they serve.
Workers who offer the highest caliber of service can earn decent living wages as servers in some cases. Unfortunately, that can be much more difficult if an employer doesn’t allow the worker to keep their tips. Some restaurants require tip pooling or tipping out certain coworkers. Are those gratuity-sharing practices lawful, or are they a violation of fair pay laws?
Tip pooling can be lawful
The federal statute that regulates the wages paid to workers is the Fair Labor Standards Act (FLSA). The FLSA establishes the right to minimum wage and overtime pay. The law also governs gratuities.
Generally speaking, workers should receive the full amount of their gratuities. Employers cannot charge them money for credit card tips or otherwise dip into the gratuities left by customers. However, a policy requiring that workers share their tips is potentially legal.
Sometimes, tip pooling involves everyone working during a shift combining their tips and splitting them evenly at the end of a shift. Other times, tip pooling involves wait staff sharing a specific portion of their total tips with coworkers in service-adjacent positions. Bartenders, hosts and others who assist in the service of customers could be part of a tip pool.
However, the rules for tip pooling prevent employers from forcing tipped workers to share their gratuities with owners or managers. Best practices also prevent companies from using tips to augment the wages of those who do not directly contribute to the service of a customer. Cooks, for example, generally have no right to participate in tip pooling because they command much higher wages than those serving customers.
In scenarios where workers have not received the gratuities they earned due to inappropriate company practices, they may have grounds to initiate a wage-related employment lawsuit. Documenting company practices can help people prove that their employers have violated their rights to fair wages.