FLSA guide to proper tip policies

In certain service environments, employees receive tips in addition to the wages they are owed for their time attendance. Restaurant waitstaff and bartenders generally fall into this category. If employees earn more than $30 a month in tips, they might qualify under an exemption from the Fair Labor Standards Act as a tipped employee. Employers can legally pay them $2.13 an hour, instead of the usual $7.25 under certain circumstances.The lower wage is contingent on the employees' tip earnings making up the difference.

Problems occur when tips received do not equal $7.25 per hour, or if the employer docks employees' wages to cover the costs of uniforms, according to the Department of Labor. Another common issue deals with tip pools and credits. Employers can claim the $2.13 an hour plus $5.12, as a tip credit, but the amount may not account for more than the employee has actually earned during a shift. Moreover, the employers must first inform workers about the tip credit before applying it to the payroll records.

If restaurant employers are uncertain about the measures that apply to various positions, they can consult state labor rights and invest in a payroll processing system that accurately calculates wages.