Tip credits, tip pools, and overtime are often abused.

The service industry is complicated to begin with. Making employers, coworkers, and customers all happy and satisfied can be exhausting. Many people don’t realize the kind of treatment people in the service industry (especially waiters and waitresses) receive. The long hours and low pay just become normal after awhile, especially when we’re young. In fact, working in a restaurant is almost a rite of passage for many young Americans. Fighting for fair wages in the restaurant industry is something we don’t always talk about, because the fight almost feels normal, and, for some, maybe even hopeless.

Fighting-For-Fair-WagesThe reality is that you can win the fight for fair wages when you are knowledgeable about local laws and employee rights. It is the responsibility of an employer to know and adhere to fair wage laws. But, not all employers are entirely familiar with the law nor do all of them follow the law. That’s why we’ve got the breakdown of what you need to know when you work in a restaurant industry. All information comes directly from the Fair Labor Standards Act (sometimes referred to as the ‘fair wages act’), and can be found on the Department of Labor’s website.

What You Need To Know When Fighting For Fair Wages

  • Minimum wage is inviolable. That means that there is absolutely no circumstance under which you should be going home at the end of the day having been paid less than the minimum wage per hour.
    • Employers must pay at least $2.13 in direct wages per hour of tipped activity, and can claim a maximum tip credit of $5.12.
    • Deductions (for breakage, shortages, etc.,) cannot reduce the amount an employee is paid below the minimum hourly wage rate, even if they made more than minimum wage in tips.
    • Any violations of the above (for example, getting paid only in tips), and the employee is owed the full minimum wage plus all the tips they earned.
  • Tips stay in the hands of the employee. While an employer can claim the credit, under no circumstances should the money become the employer’s property.
  • Tip pools are only for employees who “customarily and regularly receive tips.” If an employee is forced to contribute their tips to a tip pool that includes employees who do not customarily and regularly receive tips, they are owed the full minimum wage in direct wages plus all the contributed tips.
  • Overtime is, according to the Department of Labor, calculated on the full minimum wage, and the tip credit does not get raised for overtime hours.
  • Tipped employees sometimes do work for which they do not receive tips (i.e., cleaning floors and tables, making coffee, washing dishes). If that work accounts for more than 20% of their time, the employer cannot take a tip credit for those hours, and must pay the full minimum wage for those hours spent doing non-tipped activities.

Now that you have all the information, don’t hesitate to make some mental calculations. For too many people around the world, fighting for fair wages isn’t an option. However, we’re privileged to live in a country that protects our wages and protects our rights.

Is it time you got compensated for the work you’ve been doing? Do you feel alone in the fight for fair wages? Are you unsure of the root problem, but you just don’t seem to be making minimum wage at the end of the day? Call TMH Law for a free consultation today, because you’ve earned it.


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