Navigating the tipped employee minefield
Workers employed in tipped professions are frequently awarded back wages and overtime pay after Department of Labor investigations or court cases determine their employers violated the requirements set by the Fair Labor Standards Act (FLSA).
Some states come down particularly hard on those that violate time and attendance legislation. For example, employers found in violation of Massachusetts law must compensate workers at a minimum of three times the dollar amount not paid in accordance with wage and hour laws. The so-called treble damages are levied against all employers, even those that acted in good faith or took reasonable steps to comply with the law.
The FLSA defines tipped employees as "those who customarily and regularly receive more than $30 per month in tips." Tips are the property of workers who fit that category and cannot be used by the employer for any purpose other than to make up the difference between the required cash wage of at least $2.13 and the federal minimum wage of $7.25.
Tip pools and arrangements that allow tips to be shared among workers are allowed under the FLSA, but all participants must meet the definition of a tipped employee.
Some states come down particularly hard on those that violate time and attendance legislation. For example, employers found in violation of Massachusetts law must compensate workers at a minimum of three times the dollar amount not paid in accordance with wage and hour laws. The so-called treble damages are levied against all employers, even those that acted in good faith or took reasonable steps to comply with the law.
The FLSA defines tipped employees as "those who customarily and regularly receive more than $30 per month in tips." Tips are the property of workers who fit that category and cannot be used by the employer for any purpose other than to make up the difference between the required cash wage of at least $2.13 and the federal minimum wage of $7.25.
Tip pools and arrangements that allow tips to be shared among workers are allowed under the FLSA, but all participants must meet the definition of a tipped employee.
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