What do I Need to Know about Tip Pooling?

by Isaac Benmergui, Esq on December 28, 2017

What do I need to know about tip pooling?If your workplace includes tipped employees, you’re about to face some huge changes in the way those tips are handled. Recent changes to tipping laws by the Department of Labor mean that employers may be allowed to keep or redistribute tips from tipped employees to balance pay inequities with employees who do not receive tips in the same workplace, such as servers and cooks.

What Does that Mean for Employers?

The Fair Labor Standards Act governs how employees are paid. It sets the minimum wage, and overtime rules. For service employees, the FLSA allows these workers to be paid less than minimum age as long as tips make up the difference.

Under 2011 regulations from the Obama Administration, tips were considered the property of these service employees; they could not be withheld, redistributed, or donated to charity. But tips have meant that while service employees’ incomes rise, 300 percent in more than 30 years, non-tipped employees have only seen a 20 percent increase in pay.

To solve this disparity, some employees have eliminated tipping. Others have started to use cooks as food runners so they can be considered service employees and share in tips. The Trump Administration solution to the tip problem is to pay all workers minimum wage, and allow employers to choose what to do with tips, which could mean that they split them between front and back of the house workers. But a loophole in the law also means the employer can simply keep them. It’s worth noting that Trump himself employs tipped workers at multiple businesses, enabling him to personally profit from this rule if he so chose.

Many restaurants have come out in favor of the proposed changes—as long as management is not profiting. “It’s funny that the person who actually cooked your food is not considered part of the chain of service and can’t share in tips,” says Gwyneth Borden, an industry insider.

We believe that tip sharing is one way to help support better wages across the restaurant, while still allowing service staff to still be well-compensated by tips.”

Call Miami Employment Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Employment Law and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

Previous post:

Next post: