Tipped Employees: Know Your Rights Under the FLSA

And Find Out What To Do if Those Rights Are Challenged

Thousands of people in Pennsylvania work as tipped employees. And there are specific federal and state laws governing tipped wages—how much your employer has to pay you, what can be counted as a tip under the law, and the practice of tip pooling, among other things.

Employers sometimes try to get around these laws, so it’s important to know your rights as a tipped employee.

The Basics of Tipped Employment

Most employers are subject to federal and state minimum wage laws. However, employers whose employees earn tips don’t necessarily have to pay minimum wage. In Pennsylvania, your employer can pay you as little as $2.83 an hour, and you are expected to make up the rest toward the minimum wage through tips.

If your earnings add up to less than the minimum wage, the employer has to make up the difference.

Tip Pooling

Employers in many states are allowed to require tipped employees to chip in some of their tips to a pool in order to be distributed to other employees. Pennsylvania is one of these states.

According to federal law, managers and supervisors can’t share in the tip pool, and employers can’t keep any portion of tips. Your employer has to notify you of tip pooling expectations in advance.

As an employee, you can’t be asked to pay more into the pool than is reasonable and customary, and your wages must still reach the minimum wage. Your employer can only count the tips you actually get to keep toward its minimum wage payment obligation; if you end up making less after tipping out, they still have to make up the difference.

If your employer pays you the full minimum wage, they are allowed to distribute the tip pool to back-of-the-house employees who don’t ordinarily earn tips, such as dishwashers and cooks. However, if they only pay the $2.83 minimum, this is not allowed.

What Counts as a Tip?

In general, if a customer pays cash in a voluntary tipping environment, whatever is left over above the cost of goods and services is considered a tip that the employee gets to keep.

However, it isn’t always immediately obvious what counts as a tip, especially when the customer uses a credit card. Generally, a tip has to be voluntary, and the customer gets to determine both the amount and who gets the tip.

Is Your Employer Violating Tip Laws? Talk to an Employment Lawyer

Tip laws are complex and employers can find many ways to break those laws. If that happens, you should speak to a Pennsylvania employment lawyer.

Your employment attorney can assess your situation and help you gain recourse and compensation from your employer.

Call us at 267-273-1054 or email us at murphy@phillyemploymentlawyer.com for a free, confidential consultation today.

The information provided here does not constitute legal advice. It is intended for general purposes only. If you have questions about a specific legal issue, you should speak to an attorney.