Most employees working in the service industry will earn more money in the tips they receive, than they will receive in actual wages. It is important, however, that the people who are employed in the service industry understand how tipping works and what the tipping laws are in their particular state are, especially when it comes to ensuring they are collecting what is legally and rightfully theirs.
The Basic Laws of Tipping: With any tip earned, the employee should never be required to forfeit any part of the tip to the employer or other employees, unless there is a valid tip pooling arrangement made ahead of time.
Tips and Credit Cards: While each state has its own set of laws when it comes to tipping, some states do require that the credit card processing charges, when being used to pay for services, will be deducted from an employee’s tip. There are other states that do not allow for these charges to be deducted from an employee’s tip, requiring that they be paid the full amount given.
Tip Credits: In most states, the federal law allows employers to pay their tipped service employees under the required state minimum wage, but only if they employee is receiving enough in tips to make up the difference. This practice is known as tip credits, which refers to the amount that the employer does not have to pay, making the minimum wage, minus the tip credit, the least amount an employer can pay an employee.
Tip Pooling: Employers are allowed to utilize tip pooling in many states. With tip pooling, employees are required to provide a portion of their tips into a pool, then dividing it up amongst the other employees. It is required, however, that an employee still keep at least the full minimum wage amount they are entitled to, as well as not be required to share their tips with employees who do not receive their own tips.
If you have questions in regards to the tipping laws, or you feel that you may be a victim of wage theft, be sure to contact the employment attorneys of Maduff & Maduff today.