Do You Earn Tips as Part of Your Job? Know Your Rights

June 26, 2019  |  Employment Law, Overtime Violations
Earn Tips as Part of Your Job? Know Your Rights

If you make most of your money through tips, it can be very difficult to make sure you’re actually getting the compensation to which you are entitled. This can be a complex area of employment law, but it is important that you know as much as possible so you can make sure you are being treated fairly.

What the Law Says

The Fair Labor Standards Act (FLSA) governs rules for tipped workers. These include wait staff, bartenders, valets, and others. If you receive more than $30 a month in tips, you are considered a tipped employee under the FLSA.

If you work in a position where you pool tips with other employees, such as bartenders and busses, you need to know that you do not have to share tips will all other employees. That means you do not have to share with dishwashers, cooks or any other employees that do not normally receive tips.

Also, if a customer pays by credit card, the credit card company will usually charge the restaurant a 3 percent fee for each transaction. The FLSA allows the restaurant to recoup that money. That means if you receive a $10 tip from a customer who used his or her card, the restaurant may be able to hold back 30 cents for the transaction fee. That means you would receive $9.70 on that tip.

However, the law states that you are entitled to receive that tip money either on or before payday.

Get in Touch With Baron & Budd

There are a lot of areas of employment law that can be very difficult to understand. The FLSA is one of them – especially when it comes to tipped employees. Baron & Budd may be able to help if you have any reason to feel you’re not receiving the compensation you deserve. Please call 866-238-4143 or use our convenient online form to learn more.

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