Understanding Your Legal Rights as a Tipped Employee

Many Florida workers who receive more money in tips than in hourly wages are known as tipped employees. This could include restaurant wait staff, bartenders and cleaning staff. Tipped employees have certain wage and hour issues per the tip pooling laws that apply to their pay. They are generally paid the bare minimum by their employer and are expected to make up the difference from earned tips.

As a tipped employee, its is important to understand your legal rights. If you have been part of a tip pool and did not receive the proper tip credit, you may be eligible for past wages and other compensation. An employer who does not provide a legal wage or demands a cut of your tips is violating federal law.

Gordon & Partners is prepared to help you obtain the wages you have been wrongfully denied and with other employment law issues. Reach out today for a free consultation to determine your eligibility.

What is Considered a Tip?

A tip is money given to an employee by a customer in addition to the cost of the bill for the service that was issued. A tip is voluntary. The customer decides how much to leave based on the service received and who the tip goes to. The employer cannot set a predetermined tip value a customer must leave.

Employers can add service charges. This is an extra fee allotted for a large table of customers, private parties or catered events. The employer is not required to give any of this money to the employee. This money is part of a contract and not considered a voluntary tip.

Should a customer leaves a credit card tip, the employer could deduct the processing fee charged by the credit card company from the amount tipped. Employees, however, are not required to give their tips or part of their tips to their employer, unless they are part of a tip pooling policy.

Tip Credits

In accordance with the Fair Labor Standards Act (FLSA), Florida employers can claim a tip credit. This credit allows the employer to pay tipped employees less than the required minimum wage as long as they earn enough in tips to make up the difference.

The minimum wage in Florida is $8.56 for 2020. Under the tip credit law, Florida employers can claim a tip credit of $3.02 an hour. This means that employers are allowed to pay tipped employees as little as $5.54 an hour. The employer is only required to pay a deficit if an employee does not make enough in tips in a given work week to earn at least the full state minimum wage for each hour worked.

What is Tip Pooling?

Florida is one of many states that allows employers to require tip pooling or tipping out. All employees who are part of the pool have to hand in a portion of their tips, which are then divided amongst a group of employees. Employers are legally obligated to give employees advanced notice if there is a tip pool.

Although Florida allows tip pooling, employees cannot be forced to pay more into the pool than is customary and reasonable or an amount that is lower than the full state minimum wage.

Federal law also dictates that should an employer claim a tip credit, only employees who receive tips on a regular basis could be included in tip pooling. Tips collected from a tip pool cannot go to the employer.

The Difference Between Tip Pooling and Tip Sharing

Tip pooling includes employees who usually and regularly earn more than $30 per month in tips. This includes servers, bartenders, and bussers. Tip sharing, on the other hand, includes employees who do not usually and regularly receive tips, such as cooks, dishwashers, chefs and bakers.

Unlike tip pooling, tip sharing does not involve an equal amount of tips between employees. It is a set distribution rate generally recommended by an employer. These rates are usually a percentage of tips, sales or receipts.

Tip pooling and tip sharing is only considered illegal under the following circumstances:

• An employer counting service charges as tips
• An employer withholding credit card tips past payday until reimbursed
• An employer taking a larger tip credit for overtime hours worked
• An employer requiring employees to share their tips with him or her
• An employer forcing a deduction (for walk-outs, breakage, etc.) that reduces an employee’s wages below the minimum wage

Have Your Rights Been Violated?

If you are a tipped employee and believe that your rights have been violated, reach out to our licensed West Palm Beach employment lawyers at Gordon & Partners. We have years of experience helping employees collect back pay and protecting their best interests.

A free initial consultation with us will allow you the opportunity to learn whether you have a valid claim and are eligible to seek financial compensation. You pay nothing up front unless compensation is obtained.