According to the United States Department of Labor, minimum wage would need to $11.00 per hour to equal the same spending power to equal its buying power of the late 1960s. Currently the minimum wage is only $7.25 and for tipped employees, it remains $2.13. It has in fact, not been increased since 1991. $2.13 in 2105 is equivalent in spending power as $1.21 in 1991.
So many workers in America rely on their tips to survive. Servers, delivery drivers, bartenders, hotel workers, etc. Unfortunately for these workers, the law often allows for employers to pay them at a rate much lower than the standard minimum wage. The Fair Labor Standards Act permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. Tipped employees are those who customarily and regularly receive more than $30 per month in tips.
One thing that needs to be clear to all tipped employees: “Tips are the property of the employee”.
That is not to say that sometimes Tip pools may be used by these establishments; more importantly, however, is the fundamental rule of tip pools: No employers are allowed in the pool. Tips belong to employees, not to the company. And, under the Fair Labor Standards Act (FLSA), the federal law that governs wages and hours, “employer” includes not just the owner or officers of a company, but anyone who acts in the employer’s interests regarding an employee. In other words, managers count as employers who can’t share in a tip pool.
However, whether this rule applies to a particular workplace depends on the manager’s job duties. Plenty of employers refer to low-level employees as “assistant managers” or “shift supervisors,” without giving the employees the authority that would ordinarily go along with such a title. These employees typically do much of the same work as line employees, with a few extra responsibilities (such as scheduling, deciding when employees may take their breaks, and so on). Despite their name, these employees probably can share in a tip pool, because they aren’t true managers as the law intends the term.
If your manager is taking part of your tips, or if you feel like the tip pool you are forced to take part in is illegal, feel free to contact our Tennessee Employment Law Office and we will be glad to answer any questions you may have. We have successfully represented many individuals and groups of employees in helping them recover what is rightfully theirs under the law.