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Is your employer’s tip-sharing policy legal?

| Apr 23, 2021 | Firm News

Whether employees receive individual tips or share contributions to a tip jar, workers in restaurants, coffee shops, and other establishments often depend on tips to ensure that their pay is fair. In some cases, employers establish a tip pooling policy to distribute those tips among their employees. These pooling policies, however, must meet specific legal requirements.

What are the legal requirements for tip sharing?

In order to mandate tip sharing and tip pooling, employers must meet specific requirements. For example, under New Jersey law, employees can only be required to contribute a reasonable portion of their individual tips to the pool.

Under federal law, employers must meet other regulations:

  • The hourly pay and the tips that employees receive must allow them to earn at least the state minimum wage.
  • Employers must outline the tip-sharing policy for employees, including any required amounts to be contributed to the pool.
  • The information that employees receive must include how the tips will be distributed, whether that is based on their contribution to total work hours or on their job role.
  • Employers can only control the funds received through tips in an effort to facilitate tip sharing or distribute these funds promptly.
  • Tips can only be distributed among employees, with no portion of the pooled tips going to managers, supervisors or the business’s owner.

What if your employer has abused a tip-sharing policy?

If you believe that your employer has not followed the legal requirements for tip sharing, speak to an attorney about the legal options available to you. It is possible to right the wrong that you have experienced and to receive damages for the pay you have been denied. An attorney can examine your case and help you determine the best course of action.

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