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Article Index » flsa and wage & hour » industries/occupations » Tipped Employees
Report Link Are You Vulnerable to a Tip-Pooling Claim?
Fredrikson & Byron, P.A. - August 27, 2008
Employers increasingly face litigation under the wage and hour provisions of federal and state law, which include minimum wage, overtime pay, and equal pay requirements. A recent California decision may give plaintiffs’ lawyers yet another wage and hour issue to seize upon: tip-pooling.
Report Link Hospitality Labor Letter: Sailing Away With the Tips.
Fisher & Phillips, LLP - June 05, 2008
Cutting into potential profits, New York's highest court rules that restaurants may not pocket mandatory service charges that are represented to customers as gratuities for the wait staff.
Report Link Court Challenges of Tipping Practices May Affect Many Industries.
Jackson Lewis LLP - April 10, 2008
Employers in a variety of industries where employees receive tips should expect court challenges to their tip practices in the wake of several recent high-profile rulings, caution attorneys from Jackson Lewis LLP, one of the country’s largest workplace law firms.
Report Link Implications in Applebee's Case Still Worrying the [Hospitality] Industry.
Fisher & Phillips, LLP - March 12, 2008
In our October/November issue, we reported on a troubling interim decision by a federal district court judge in Missouri. The case involved pay for bartender Gerald Fast, and focused on two issues: whether the restaurant's automated timekeeping resulted in off-the-clock work (referred to as "Appletime"); and whether the restaurant unlawfully applied the federal tip credit to non-tipped work the bartender was required to do, in addition to his other duties.
Report Link Pay for “Tipped Employees” Under the Florida Minimum Wage Act.
Ford & Harrison LLP - January 14, 2008
Most Florida employers are aware that the Florida Minimum Wage Act imposes a higher minimum wage than is required by the federal Fair Labor Standards Act. As discussed in our January 3, 2008 Legal Alert, the state minimum wage increased on January 1 to $6.79 per hour (up from $6.67 per hour in 2007). This rate is higher than the current federal minimum wage rate of $5.85 per hour.
Report Link Simple Guidelines on Making Your Tip-Pool Legal.
Elarbee, Thompson, Sapp & Wilson, LLP. - July 13, 2007
It is common in the hospitality industry for employees to share tips with other employees. In many instances, the practice of sharing tips is required as a condition of employment. Although common, not all practices comply with applicable law, but a successful, legal tip pooling arrangement can help control labor costs.
Report Link Is $2.13 An Hour Enough? Higher State Minimum Wage Rates Impact Tip Credit.
Fisher & Phillips, LLP - April 23, 2007
With employers making adjustments in their payroll systems, some of those in the hospitality industry are wondering how a state’s higher minimum wage rate impacts the tip credit.
Report Link Is $2.13 An Hour Enough? Higher State Minimum Wage Rates Impact Tip Credit.
Fisher & Phillips, LLP - March 30, 2007
Many employers are nervously awaiting the possibility of a new federal minimum wage under the FLSA, while others must deal with increases already passed at the state level.
Report Link Both Workers and Employers Should Know Tip-Pooling Laws.
Fisher & Phillips, LLP - March 13, 2007
Tip pooling is a way of life in certain establishments. Tip-oriented businesses from restaurants to golf courses can, under the law, require tipped employees to share that money with other employees.
Report Link Dealing With Employees' Tip Income In Large Food and Beverage Establishments: New IRS Agreement ("ATIP") Available January 1, 2007.
Littler Mendelson, P.C. - September 28, 2006
Employers that have a lot of tipped employees, such as restaurants and casinos, often face a host of employment law challenges, including payroll challenges. Under the Internal Revenue Code (Code), tips are income subject to income tax withholding and usually subject to Social Security and Medicare taxes as well. Problems often arise when the employer does not know exactly how much tip income an employee receives because of cash tips or because the employees, such as hosts or bussers, are indirectly tipped by other employees, such as waiters.
Report Link The Department of Labor Issues Opinion Letters Which Are Illustrative of the DOs and DON’Ts of Deducting Fees and Making Other Payroll Deductions From an Employee's Salary (pdf).
Phelps Dunbar LLP - June 20, 2006
In a recent wage and hour opinion letter from the DOL issued earlier this year, the DOL indicated that employers may deduct from their employees’ tips the “average standard composite” cost of the processing fees that must be paid to credit card companies to convert the cash to tips.
Report Link Federal Court Affirms Legality of Deducting Credit Card Processing Fees From Servers' Tips.
Littler Mendelson, P.C. - April 14, 2006
A federal District Court in Illinois recently confirmed that a restaurant has the legal right to deduct the cost of credit card service charges from tips written by patrons for servers, in Gillis v. Twenty Three E. Adams St. Corp. d/b/a Miller's Pub , No. 04-4012, 2006 U.S. Dist. LEXIS 12994 (N. D. Ill. Mar. 6, 2006). In doing so, the court rejected a class action brought by servers who claimed to be entitled to a refund of the amount deducted. The decision brings greater clarity to the handling of credit card tips and confirms that the U.S. Department of Labor's (DOL) pro-employer position on this issue was correct.
Report Link DOL Opinion Letter Clarifies Permissible Deductions from Credit Card Tips.
Ford & Harrison LLP - February 08, 2006
The U.S. Department of Labor (DOL) recently issued an opinion letter stating that restaurant employers may deduct an average standard composite amount from tips included on customers' credit card payments to recover the charges imposed by the credit card companies for liquidating the tip amounts, rather than deducting the precise amount charged by each credit card company. However, the employer may not deduct an amount that exceeds the employer's actual expenses incurred in transferring to cash the tips charged on a credit card. Additionally, an employer cannot deduct its administrative costs associated with credit card transactions from an employee's tips.
Report Link No free rides on 'imposed gratuities' for chauffeurs (pdf).
Jones Walker - November 10, 2005
The Fair Labor Standards Act (FLSA) requires you to pay employees the federal minimum wage and overtime when they work more than 40 hours in a workweek. The FLSA provides certain exemptions for employees who receive tips. In some circumstances, you may pay tipped employees a base hourly wage of less than the federal minimum wage because the tips they receive are counted as part of their wages. That “tip credit,” however, is allowed only if certain requirements are fulfilled. The U.S. Department of Labor (DOL) recently issued an opinion letter that addresses the question of whether an employer may apply an “imposed gratuity” toward its tip credit and explains the tip credit and overtime calculation for tipped employees in detail.
Report Link Tipped Employees Under the Fair Labor Standards Act (FLSA).
Department of Labor - (No Date)
Fact Sheet 015. This fact sheet provides general information concerning the application of the FLSA to employees who receive tips.
Report Link Tips.
Department of Labor - (No Date)
DOL's Topic Page on tips; includes brief description of tips and list of related resources.

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