Employers in many service related industries have a nasty habit of spending their employee's tips. This site is dedicated to the men and women who have been victims of wage theft. Please submit your story here. For instance, many workers are currently being threatened and intimidated into giving part of their tips to other workers. While many business owners want to call this tip pooling, I along with many other workers across this country call it tip theft.
If an employer is telling you what to do with your tips, tell us your story. It is my belief that no employer should be telling his employees what to do with the tips customers present them. For instance, when an employer tells an employee that he must share his tips with some other workers, the employer is actually spending the employee's tips. Many employers are forcing workers to share their tips with other workers so that the employer can pay those other workers less in hourly wages. Here is your chance to tell people what's going on.
TIPPING-USA
A blog dedicated to those workers who personally receive tips from the public and who are currently seeing their tips indirectly taken away from them through unethical and unscrupulous business practices such as employer required tip pooling and tip credits.
My Mission
My Mission
I have been working for tips for over 33 years. Over the years I have researched federal laws, court cases and state laws concerning tips. My mission here, is to provide workers, specifically those who are earning their living from tips, resources and support in their fight to protect and keep the tips our public has so graciously presented them. My mission is to put an end to several business practices which can, and in many case do, enable business owners to financially benefiting themselves to the tips customers present their workers.
There are two particular business practices which are at the heart of blatant tip theft in America. The first is, employer required tip pooling and the second is, the tip credit.
The truth of the matter is, when an employer requires employees to turn their tips over to a tip pool or tip out system, the employer is controlling or appropriating money that is not intended for the employer. The money that the employer is appropriating is intended for a specific worker. Many people have argued, several of whom were judges, that tips are intended for more than one specific worker. The problem with accepting such an opinion as fact is, if tips do not simply belong to the individual whom it was presented, then it becomes nearly impossible to determine who the tips actually belong to. The truth of the matter is, if tips are not viewed as the property of the individual whom the tip was presented, then someone, other than the customer, will have to determine who is entitled to the customer's tip. In other words, if we ignore the physical evidence, that being, who did the customers actually give the tip to, and if we instead attempt to guess at who the customer might have intended to tip, then the customer no longer has any say over who his tip belongs to.
It is my belief that each customers should be determining who his or her tip belongs to. We are talking about private property and tips are the customer's private property up to the point that they are given to a particular worker. Unless the customer specifically communicates his desire to tip several workers with one tip, there should be no question as to whom the tip belongs. The customer's actions in presenting a tip to a specific worker should be conclusive evidence that the customer's tip belongs to the worker to whom the tip was presented.
Employer required tip pooling disregards the customer's right to determine who his tip should belong to. Instead of the customer determining who his tip belongs to, an employer who requires tip pooling will determine both who will receive a portion of the customer's tip and what portion they will receive.
The problem with such a business practice is, the customer who presented the tip has not consented to the business owner appropriating his tip for him. While an employee, who has been given a tip, is clearly authorized and would have every right to distribute the customer's tip to other workers and thus control who will receive a share and how much they will receive, an employer is not authorized, and I believe should have no right, to control the customer's private property in such a manner.
Employer required tip pooling is a controlling of the customer's private property which, in turn, can provide huge financial benefits to those employers who choose to control the customer's tips in such a manner.
Businesses across this country are utilizing tip pooling as a means to supplement their payroll funds. Instead of using their own money to pay, what are traditionally non-tipped workers, an employer who requires tip pooling, is able to use his tipped worker's tips to pay his non-tipped workers. Many restaurants are forcing waiters to share part of their tips with busboys, hostesses, bartenders, food runners and other workers simply so that the business won't have to use it's funds to pay these workers.
The tip credit works together with employer required tip pooling to insure that an employer who adopts a tip pooling policy gains the maximum financial benefit of controlling other people's private property.
The tip credit is an allowance that business owners lobbied our government for which, in effect, gives over a portion of the customer's tip to business owners. While the tip credit has been explained simply as an allowance for an employer to pay a sub-minimum wage to tipped workers, the truth of the matter is, the tip credit is solely based on the tips the worker receives and is an allowance concerning those tips, not minimum wage.
What most people don't realize is, the tip credit doesn't simply allow restaurants to pay their workers $2.13 an hour. The provisions of the tip credit require that an employee who is being paid $2.13 an hour must receive at least $5.12 an hour in tips so that the employee's income reaches the minimum wage requirement of $7.25 an hour. An employee who only receives $4.00 an hour in tips must be paid $3.13 an hour, instead of $2.13 an hour. What this insight proves is that the tip credit is based on, and concerns itself with, tips, rather than minimum wage.
The truth of the matter is, while the tip credit is advertised as an allowance to alleviate the burden that some employers have of paying their tipped employees the minimum wage requirement of $7.25 an hour, employers are still required to insure that their employee receive at least $7.25 an hour in income.
The problem again is, tips are the customer's private property, while the tip credit, in effect, is giving over a portion of the customer's tip to business owners, customers have not consented to their tip being given over to business owners. The federal tip credit includes a disclaimer which sheds a little light on the true intend of those who wrote up this law which appears to give over the customer's tip to business owners. Federal law, 29 USC section 203(m) explains that in order for an employer to take advantage of the tip credit, all tips received by the employee are to be retained by the employee. The problem is, there is no way an employee can retain all his tips when his employer is crediting part of his tips to the employer.
The tip credit allows businesses to indirectly take a portion of their worker's tips. Instead of directly taking $5.12 an hour in tips away from a worker, the tip credit was designed to enable employers an ability to indirectly take $5.12 an hour in tips away from their worker. Those writing the law added a disclaimer which seems to suggest that they didn't really know that the law they were writing allowed employers an ability to retain their worker's tips. Why would they write a law that allows employers an ability to indirectly take part of their worker's tips and then explain that the only time such would be allowed is when all tips received by the employee are retained by the employee? When an employer takes a tip credit, he is taking part of the tips. He then uses the tips, instead of his own money, to pay the employee's minimum wage. Clearly those writing the law wanted it to be known that it was not their intent to allow employers to retain their employee's tips. And yet, that's exactly what the tip credit, in practice, is allowing.
Employers are indirectly stealing their worker's tips when they take a tip credit. Instead of directly stealing the tips, an employer who takes a tip credit deducts part of the employee's tips from the employee's hourly wages. By lowering an employee's hourly wages from $7.25 an hour to $2.13 an hour, the employer is gaining $5.12 an hour in personal income. By lowering an empoloyee's hourly wages when he receives tip income, an employer is able to indirectly benefit himself to the tips his employee is receiving. An employee who receives $5.13 an hour in tips and whom is seeing his hourly wages reduced by $5.13 an hour is actually seeing his tips nullified due to the reduction in hourly pay. Instead of the employee solely benefiting from customers tipping him. the employer who is taking a tip credit is benfiting from customers tipping his employee.
While many employers across this nation are lowering the wages of their tipped employees from $7.25 to $2.13 an hour in an attempt to benefit themselves to the tips their workers are receiving, many have figured out that they can benefit themselves even more to the tips customers are presenting their workers. By forcing waiters and other directly tipped workers to give a portion of their tips to other support staff, restaurants and other service related businesses can take tip credits on many types of employees who traditionally have not received tip income. Many restaurants are forcing waiter to tip out support staff simply so they can pay the support staff $2.13 an hour like they do their waiters. Instead of being restricted to stealing $5.12 an hour in tips from their waiters, they can steal $5.12 an hour in tips from busboys, bartenders, food runners, hostess and others who receive a share of pooled tips.
Pooled tips enable employers the ability to expand their tip theft to more employees. Instead of being restricted to indirectly stealing only a portion of the waiter's tips, employer required tip pooling enables employers with an ability to steal a bigger portion of the waiter's tips. If you force the waiter to give part of his tips to other workers, then you can indirectly steal part of these other worker's tips too. The more employees an employer adds to his tip pool, the more tips an employer can indirectly steal for himself. An employer who requires tip pooling can reduce the hourly wages of every employee who is added to the pool. Every time the employer is able to reduce a workers hourly wages on account of tips, the employers personal income increases due to the fact that his payroll expenses are subsequently reduced.
In conclusion, it is my belief that by exposing these unscrupulous business practices we might be able to put an end to the fraud such practices surely are. Customers are graciously tipping workers to increase the worker's income, not their employers. Employers who are utilizing business practices, such as those we have addreessed here, are defrauding the public. The public's tips are not intended as additonal income for business owners. This is the truth and it will never go away.
