Tipped Employees: Are You Being Paid Fairly?
You may already be aware that federal law requires most workers be paid for every hour that they work, and to be paid extra for working overtime. However, that rule applies a little bit differently if you are a worker that gets tips. If you are a worker that gets tips, you may be entitled to sue your employer if you are not being paid the right amount and in the right way.
The FLSA and Tipped Employees
It makes sense that the Fair Labor Standards Act (FLSA), the law that requires that most hourly employees be paid for every hour they work, does not require tipped employees be paid minimum wage. Tipped employees only have to be paid $2.13 per hour by their employer. This is because the law takes into account the fact that an employee who gets tipped will make up some of the minimum hourly wage through tips. The law gives employers a “credit” for the rest of the hourly wage that an employee would make if she or he were not a tipped employee.
However, if the employer does not follow strict guidelines, the employer will not get the benefit of the credit, and will have to pay the employee the full hourly minimum wage.
Requirements for Tipped Employees
If a tip pool is used—for example, if there is one jar or collection area where all tips are collected, and then later divided amongst employees—only employees that are traditionally tipped, can be included in the tip pool (although that rule is currently under review).
For example, if a waiter and a bus boy are included, that would be fine—these positions are ordinarily tipped. However, if a manager or a cook were included, that would violate the law, because those positions are not ordinarily tipped positions.
It is permissible le for an employee to include anyone and everyone in the tip pool, if everyone is making the full hourly minimum wage. However, managers or owners or supervisors can almost never receive anything from a tip pool.
Employers who use a tip pool must have a written notice to employees that says:
- what employees are being paid towards their hourly wage
- That the employee must actually receive enough tips to earn $7.25 per hour, before management ever takes any of the tips from the tip pool
- Unless a tip pool is used, all tips earned by an employee will be kept by the employee
- That no tip credit will be used unless these provisions are told to the employee
Violations of the FLSA carry steep penalties. Not only can an employee be paid what he or she should have made, but the employer can be liable for twice the amount owed to you. So if your employer improperly divided a tip pool, and you were, through the term of your employment, not paid $5,000, your employer would owe you $10,000, plus attorneys fees.
Questions about whether you have been paid fully and fairly for overtime or hours worked? Contact the Miami employment attorneys at Velasquez & Associates P.A. today with any questions you may have.