Tip sharing: Is it legal?

Many workers rely on tips to make a living. Wait staff, bartenders, baristas, hair stylists, and cleaning staff are just some examples of employees who rely on tips.

One common practice in industries where tipping is the norm is tip sharing. Tip sharing involves pooling tipped employees’ earnings and dividing them among employees. The tips may be divided among tip-receiving employees and other employees such as dishwashers, bussers, cooks, and others who don’t commonly receive tips themselves.

Most states allow for tip sharing, but there are certain rules and limitations that apply. Here are two important things to remember:

  • Minimum wage requirements: Tip-earning employees are only required to place tips in a pool that exceed minimum wage. Employees are not required to share tips if their total earnings equal less than minimum wage.
  • Employers excluded: Employers cannot take part in tip sharing. Tip sharing is only for employees who receive tips – not those who employ them.

When an employer takes tips from a tip pool, or when a tipped employee is earning less than minimum wage, it may be time to speak to an employment law attorney about what is happening.

Although tip pooling is legal in many states, employers must follow the law. When they don’t, they can be held accountable.

Talk to an attorney today: Call Alan Lescht & Associates, P.C., at 202-463-6036 for answers to your questions about tip sharing – and to learn what to do if your employer is violating the law.