Do You Rely On Tips For Your Income? Know Your Rights

Jobs that pay partly in tips, like restaurant server jobs, can be great if you work in a place that's busy and where the customers regularly leave generous tips. However, those jobs can also feel a little precarious from time to time. After all, it can be tough to budget if you don't know exactly when you might get a lot of tips and when you might have a slow night. It can get even more complicated if you're not exactly sure that your tips are being handled fairly by your employer. Take a look at some things you need to know about your rights as a tipped employee.

Tip Credit

Chances are good that if you're a tipped employee, you're making less than the federal minimum wage, and you're supposed to make up the difference with your tips. But what happens if you find that during some shifts, there aren't enough customers tipping enough to make up the difference between your base pay and the minimum wage?

If you're a tipped employee, your employer is taking what's called a "tip credit," asserting that you'll make enough in tips to end up getting at least the minimum wage for the hours you work. If you do not end up making at least the minimum wage for your hours worked between your tips and your base pay, your employer is obligated to make up the difference.

Tip Pooling

Does your job require you to pool your tips with other employees and divide the total up between all of you? This can be a bummer if you've had a really good night while everyone else has been struggling, or it can be a blessing if you're the one that's had trouble getting good tips during that shift. Either way, tipped pooling is typically a legal arrangement – as long as you're only sharing tips with other tipped employees.

However, if your job requires you to share tips with employees who aren't working for tips themselves, they may be violating federal employment law. For example, in a restaurant, servers usually can't be required to share tips with cooks. Also, your employer is not allowed to take a share of your tips, and neither is an employee who acts on the employer's behalf, like a manager. So if your employer is forcing you to share tips with them or with someone who has legitimate managerial duties, they are probably doing so illegally.

Paying For Customers Who Dine and Dash

Unfortunately, every now and then a restaurant or bar will have a customer that orders food or drinks, then attempts to sneak out without paying their bill. This is sometimes called a "dine and dash." As you can imagine, it's frustrating for employers who are stuck with the cost of that customer's order. Part of a servers job is to try to keep an eye on customers to prevent such walkouts from happening, and some employers have been known to hold servers responsible for the bills of customers who dined and dashed.

However, the truth is that you can't be held responsible for another person's actions, and if you're a tipped employee, your employer is not allowed to deduct those costs from your wages if it will put you below the minimum wage. Tips are supposed to be retained entirely by the employee, with the exception of a tip pooling situation, and they can't withhold money from your base pay if they're not paying you more than the minimum wage.

It's important to know your rights as a tipped employee so that you can be certain you're being treated fairly. If you suspect that your employer is not following the law, an employment law attorney in your area can help you recover any money that you're entitled to.