Tip Pooling and Tip Sharing
There are many positions that take tips into consideration when determining the wage of their hourly workers. As such, it is typical and legal for a company to pay an employee less than minimum wage if they will be compensated by tips that bring them up to or above minimum wage.
In some businesses, tip pooling or tip sharing is instituted to make sure that each employee receives an equal wage and earns above minimum wage. In these cases, all of the separate tips that employees earn are combined and then divided equally among workers.
While tip sharing is a legal practice in some cases, employers cannot apply tip sharing to all workers in an industry. Understanding the difference between legal and illegal tip sharing is important for all workers to be aware of in order to ensure that they are not being deprived of their hard earned wages.
Illegal vs. Legal Tip Sharing
Tip sharing is only legal when tips are collected and divided among workers who provide a direct service to a patron. As such, anyone who comes into contact with and serves a customer has the legal right to participate in a tip sharing program. For example, in a restaurant situation this would include:
- Waiters and waitresses
- Bar staff
- Busing employees
- Hosts and hostesses
In some situations, an employer may attempt to share tips illegally with employees who have not provided a direct service to the customer, and in doing so, deprive the above mentioned employees of their earned wages. Examples of workers who are not eligible to share in a tip pool (again, using a restaurant as an example) include:
If you are being illegally deprived of your wages due to an illegal tip pool, you deserve to be compensated by your employer. Contact the Austin employment attorneys of The Melton Law Firm today at 512-330-0017 to schedule a consultation.