You are a waiter, waitress or a busboy, but your employer is forcing you to split your tips with managers or workers who do not directly serve the customers. You are entitled to your fair share of the tips and you should not be forced to share your tips with workers who do not serve customers. The employer should pay non-service employees fairly and as required by law, but not out of the tips you have earned. Nor can your employer take a “tip” credit against your hourly wages unless the customers are actually giving you a specified threshold of tips.

Your employer can pay you less than the standard minimum wage by taking a tip credit, as long as you earn the legally required minimum in tips per week. But in order to do so, there are a few things that he has to do. Your employer needs to put up the Department of Labor poster, which explains the tip credit, in the workplace. You need to be informed of the tip credit and with your weekly wages, you need to be given a written statement describing your hourly wages and your tips, and how the tip credit is applied. Detailed records of your wages and hours must be kept and you must be given notice of that information. Your employer or your manager cannot take any of portion of your tips. If the tip payment is through a credit card payment, a proportionate share of the actual credit card company processing fee can legally be deducted from your tip payment. And, of course, you must actually be paid the reduced amount allowable for a tip credit.

If you are a waiter or waitress, you probably agree on a tip sharing arrangement with your colleagues who bus the tables, and maybe with other workers who directly provide services to the customers, such as bartenders and hosts. Managers or owners cannot take any portion of these tips. Sometimes the employer decides the percentage sharing arrangement; that is legal, as long as the sharing is among employees entitled to share in the tips and the percentages allocated are customary and reasonable.

Service employees who are forced to share their tips with other employees who do not actually serve customers are often shortchanged when their employer uses the earned tips to pay non-service employees and managers. Federal Law and New York State law do not permit the sharing of tips with employees who do not actually serve customers. Nor can your employer subject you to retaliation in New York State or New York City because you complain that he is unlawfully taking the tips that you earned. 

Contact us online or call us at (212) 949-1001 if you think that your employer's harmful actions stem from taking tips that you have earned. We will use our more than 25 years of experience to help you resolve the matter by negotiation or by going to court in the State of New York or New York City.

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