FLSA Amendment on Employee Tips

Employers May Not Take from Employee Tips, According to FLSA

Under new amendments to the Fair Labor Standards Act (FLSA), employers in the bar and restaurant industry who do not take a tip credit “can require tip-pooling and include non-supervisory, non-tipped employees in the pool”.

Under the FLSA, employers are required to pay employees the federal minimum wage, however under certain conditions, “tipped” employees can receive a “tip credit counting up to $5.12/hour of such employees’ tips against the federal minimum wage obligation”.

If a tip pool is used, an employer cannot take a “tip credit” – a fact that does not change under the new amendments.

However, Norris McLaughlin & Marcus, P.A. indicates that there are new rules employers must abide by:

What has changed, however, are the rules for employers that do not take a tip credit, but pay tipped employees at least $7.25/hour. An employer that does not take a tip credit can require tip-pooling and include non-supervisory, non-tipped employees in the pool. But the tipped employees cannot be required to share their tips with the employer—including managerial and/or supervisory employees—whether a tip credit is taken or not. Stated differently, employers cannot, at any time, take a portion of its tipped employees’ tips.

Employers are reminded that they are prohibited from taking a portion of an employees’ tips at any time, and that they should review the updated regulations to ensure they are in compliance.

For more details, please click here.

tip jar

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