Help me get the tips I earn!

January 4, 2008 12:21 PM

I've been working as a waitress at a restaurant. People leave tips for the waitstaff. The restaurant takes these tips; I never get any. This cannot be legal, can it? What can I do about it?

The restaurant is a small operation, and the division of labor is odd and disorganized. Waiters don't have tables, they have duties. Filling water glasses, getting drinks, taking orders, delivering orders to the kitchen, bringing food up from the kitchen to tables, totaling checks, manning the cash register-- on any given night I will do a subset of these tasks depending on what the manager feels like. So it's not clear who the tips from any given table should go to. But still, they are intended for the waitstaff, not the restaurant's coffers, and should be distributed among us rather than confiscated. Anybody know anything about the laws on this, or where to look? I'm in the US, in Indiana, if it matters.

Attempts to ask about the tips results in evasive answers-- one manager says they'll be distributed eventually (I've had several paychecks and have not seen a dime), another one says they won't be, but I'm getting 50 cents more an hour than they said I would when I was hired, and it's (a little) more than minimum wage, so what's my problem?

A compelling argument can be made for me just quitting. The problem is, I live in a town where decent jobs are difficult to come by, and for a number of reasons I'm not the most employable person. I don't have another job lined up and I can't afford to leave until I do. Beyond that, if this is actually illegal, I feel that even if I do quit I ought to do something about it (report them? how and to whom?). The business model of the place seems to be to hire people who have difficulty finding jobs, and therefore will quietly accept bad treatment; something really needs to be done about that.

posted by bookish to work & money (58 comments total)

The thing I would worry about is what will happen when your W-2 shows that you work for a restaurant and it can be determined that you're a waitress (if they're paying you wait staff-styled wage) and you haven't claimed any tips as income.
posted by Dee Xtrovert at 12:33 PM on January 4, 2008

One place to call.
posted by ClaudiaCenter at 12:37 PM on January 4, 2008

I don't know the legal answer, but as patron of restaurants, I would consider this theft. I leave tips for the waitstaff. I would be outraged if I found out my money was going to the managers.
posted by grumblebee at 12:40 PM on January 4, 2008

but I'm getting 50 cents more an hour than they said I would when I was hired, and it's (a little) more than minimum wage
So are you making 50 cents more than the regular minimum Indiana $5.85/hr wage, or 50 cents more than a waitstaff minimum wage (does Indiana have that?)?
posted by otherwordlyglow at 12:41 PM on January 4, 2008

Googling turned up a lot of refrences to it being illegal, or it being considered fraud since the customers do not know that the tip is not going to the waitstaff, but I couldn't find any clear-cut law forbidding it.

I did find a good list of tipping related laws though.
posted by burnmp3s at 12:46 PM on January 4, 2008

In answer to your first question, it's certainly legal. You have no way of proving that money was for you. If the money was left on the restaurant's tables, or on a credit card slip offered by the restaurant, they can make a good case that it's "theirs". And, as you know, lots of restaurants enforce tip pooling, or discourage tipping by adding a service charge to the bill. Sure, ethically the money should be distributed. But I think you'll have a hard time forcing them.

If you suspect that they are simply pocketing the money and not declaring it as income, report them to the IRS.
posted by ubiquity at 12:46 PM on January 4, 2008

Does the owner know? Maybe it's not getting to her either, but is staying with the managers.
posted by Pants! at 12:48 PM on January 4, 2008

I don't know whether this is illegal. I suspect it is not given that there seems to be wide latitude on how employers can direct that tips are allocated. But the people who would know would be the Wage and Hour bureau. You might give them a ring.

Now if you leave this job, I'd probably go to the press. Even if this were legal, it's wrong, and I would think you would be able to find a TV station that would be willing to alert consumers that the owners are just pocketing diners' money at this establishment. Also, if you suspect that the money is just going to the managers or is not being reported by the business, you might contact the IRS.
posted by grouse at 12:48 PM on January 4, 2008

There may not be any laws against it, but they are ripping you off.

Some restaurants do pool tips and then divide them in some way, and maybe you haven't worked there long enough for it to happen.

Take the bull by the horns, talk to the person who hired you, or the owner. Ask to sit down privately to discuss a problem, then explain that you'd like to understand how and when the tips that customers leave for the staff are paid. If they explain it to your satisfaction ("we do this quarterly", for example), fine. If they don't, tell them you are not happy with that situation, that the tips belong to the staff, and you can not understand how the restaurant can keep them.

If they don't agree to pay tips out on some reasonable schedule, look for another job. Really, you can do better.
posted by beagle at 12:53 PM on January 4, 2008

Have one of your underemployed friends stand outside with a sandwich board saying "management steals the waitstaff's tips". Results will be instantaneous.
posted by notsnot at 12:59 PM on January 4, 2008 [2 favorites has favorites]

Your restaurant, IMO, is going through a deliberate practice of screwing you over, if not outright stealing (I'm not sure what the law exactly says about who is "entitled" to tips). The very system you work under is set up to promote this practice by not assigning specific tables to the waitstaff.

Have you spoken to the other waitstaff about this? What do they say? Have you approached management collectively regarding this? If not, start there. If the reaction is anything short of immediate payouts, go straight to your state's Dept. of Labor.
posted by mkultra at 1:00 PM on January 4, 2008

In NC, at least, if they pay you regular minimum wage, they can and do keep tips (when you are training, that is what happens. At least at Waffle House.)

But before you squawk too much you might want to estimate just how much you are losing in tippage a night-depending on what kind of tippers and how many tables you have you might actually be making MORE money with this system. (Small towns don't usually have big tippers.)
posted by konolia at 1:10 PM on January 4, 2008

The only complicating issue is that you make the actual minimum wage, rather than whatever the waitstaff minimum wage is (like $2.50, last time I checked). The tradeoff for making waitstaff wage is that you make it up on tips and the restaurant is supposed to ensure you make at least the regular minimum wage on every paycheck.

So, you might want to consider whether you'd still work there if you'd make $2.50 an hour if you got to keep the tips.

That all said, sounds really really crooked. I'd be surprised if someone wasn't pocketing all the tips.
posted by electroboy at 1:11 PM on January 4, 2008

There's no way this is legal. It's outright fraud. You could contact your State Attorney General,
the Better Business Bureau, a local labor lawyer, and your city's sales tax collection unit.
posted by aerotive at 1:12 PM on January 4, 2008

I think a call to the IRS might be in order no matter what. If you report on your taxes that you're a waitress with $0 in tips, that might raise a red flag for them. So you might want to call now, explain the situation, and see what they have to say about protecting yourself. That also might raise their interest in what is happening to the tips.

Does this place take credit cards? I would think that at the very least, credit-card tips would be traceable and potentially incriminating for whoever is getting them if they're not reporting that income.
posted by adamrice at 1:13 PM on January 4, 2008

Indiana's minimum wage laws.

The issue is whether you're being paid $5.85 an hour, or $2.13 (or $2.65, or any less than $5.85). If you are making $5.85 (or more) an hour, then they are likely not required to give you tips.
posted by occhiblu at 1:36 PM on January 4, 2008

In most states, this practice will land them in hot water. I know of a number of lawsuits against restaurants who withheld a percentage of tips. I don't know that I've ever heard of a place keeping the entire tip. The only one I remember off the top of my head is Old Homestead Steakhouse, which I only remember because I ate there. They were sued by their staff for $1 million for taking a slice of the tips for managers in the beginning of last year. It may also matter if you are paid less than minimum wage (which is allowed for restaurant workers, but that may be what triggers the tip laws in your state).
posted by Lame_username at 1:43 PM on January 4, 2008

Okay, to clarify a few points:

I am getting paid above the actual minimum wage, not the waitstaff wage. So this is not a minimum wage issue.

The issue is that customers leave tips intending for them to go to the waitstaff; for management to take them without informing the customers seems fraudulent to me. In fact, I once heard the manager tell a customer (who was concerned about which of her waiters would get the tip she left) that the tips were pooled and distributed to all the waitstaff, an outright lie.

They are not pooling the wages to give to us at some later date. I have spoken with several current and past employees about it (including one who worked there for over a year); the consensus is that whatever they tell you, no one ever gets any tips. When I try to talk to the management about it, they are very evasive (They're Indian. It's hard to get a straight answer out of them). I don't know the owner's name or how to get in contact with him/her.
posted by bookish at 1:53 PM on January 4, 2008

I really can't think of any reason, other than tips, to be a server at a restaurant. First and foremost, find another waitress job, and quit this one! Then maybe you can think about fighting for your ex-coworkers' rights (if they have any).
posted by iguanapolitico at 2:11 PM on January 4, 2008

From my admittedly out-of-date experience waiting tables, what they're doing sounds legal, because they're paying you the minimum hourly wage rather than the reduced wage that you'd get if you were keeping your tips. They might, however, be defrauding the customers, by taking money that the customers intend to give to the staff. But I think that a customer would have to forge ahead with that angle; I'm not sure you could.

The real consideration for you is whether this is a battle worth fighting. It sounds like you may not want to burn your bridges at this place -- your resume / experience isn't strong enough for you to get a job without using this one as a reference, I suspect. (Or, put differently, it will help you substantially to have this place as a positive reference when you do go looking for another job.)

Considering that even if they did give you the tips, the wage laws are structured so that you'd probably make exactly the same amount (since they'd underpay you and let the tips be the difference, up to standard minimum wage), I don't think you want to make an issue out of this, righteous as it may be.

If you really have to stick it to them, maybe the best solution is just to let it be known (around town, outside of work) that the employees don't keep the tips, so that customers just stop tipping. That way, the restaurant will actually feel the pain. (And maybe, if one of the customers is indignant enough, they'll go after them for fraud or something, or generally make an issue of it.)
posted by Kadin2048 at 2:21 PM on January 4, 2008

The thing is, it works both ways.

Ok, so the management aren't telling the customers that the tips don't go to the waitstaff, but I'm better the waitstaff aren't telling the customers that they're getting paid above minimum wage.

Its expected that tips go to waitstaff but its also expected that you're underpaid and need the money.

If it were me, I'd be happy I was being paid a real wage and not complain about not getting tips. Yes it sucks that they keep the tips and yes, its wrong BUT it could be a lot worse - they could pay you half what you're getting now.
posted by missmagenta at 2:23 PM on January 4, 2008

they could pay you half what you're getting now.

Not legally. If they paid her half what she gets now they would have to make up what she didn't make in tips to bring her up to minimum wage. Not that that always happens.
posted by grouse at 2:33 PM on January 4, 2008 [1 favorite has favorites]

Call the local newspaper, post it on a local website, put up posters near the restaurant, post this info on chow hound and other restaurant review sites and force the issue if you want, but they will likely grill everyone to find out who did it and that could be very uncomfortable. It does seem like fraud to me. If I knew that this were the case I would not leave any tip at the restaurant; that money is for the wait staff, not the managers and owners. This brochure seems to indicate that what they are doing is not legal, but it may only apply where they are taking the tip credit. I would at least call the number on it to find out more.
posted by caddis at 2:56 PM on January 4, 2008 [2 favorites has favorites]

Call a local news station, ask for the assignment editor or their "I-Team" reporter (every station has one of these now-- an investigative reporter that does stories like these).

They love stuff like this. You can do it anonymously if you want to.
posted by wfc123 at 2:59 PM on January 4, 2008

That is really crummy. I worked at one place that included an 18% gratuity on the check and servers did not get that, it went to the organization. However, I was making $12 an hour as a server, not minimum wage. The patrons are tipping you on service. What is your incentive to do a good job if you don't get the tips intended for you? I'm sure if the patrons knew you weren't getting the money they'd stop tipping.
posted by 45moore45 at 3:07 PM on January 4, 2008

Wow, the only place I've heard of this happening was at a restaurant in Virginia that was staffed mainly by Hispanic immigrants of questionable legality. It was an ugly cycle; they didn't get the tips meant for them, but they couldn't complain because management could turn them in, or at best fire them without the possibility of recourse. The waitstaff also couldn't complain publicly, because, well, most of them were illegal. It was awful.

I think what I'm saying is that, unless you haven't shared the whole story, you DO have the ability to fight this without serious repercussions for yourself. Make a scene, if just for the waitstaff in Virginia who can't.
posted by sarahsynonymous at 3:13 PM on January 4, 2008

caddis has the right link (repeated here).

(OMG, I was having an ikkuyu2 moment reading the answers to this thread.)
posted by ClaudiaCenter at 3:15 PM on January 4, 2008

I was having an ikkuyu2 moment reading the answers to this thread.

How's that?
posted by grouse at 3:22 PM on January 4, 2008

When I try to talk to the management about it, they are very evasive (They're Indian. It's hard to get a straight answer out of them).

If they're paying you above minimum wage and keeping tips, they probably know that this is a legal practice to get some extra money.

Small aside. I'm Indian. I frequent a LOT of Indian restaurants, and I used to make it a habit of getting to know the owners (you know, sign of camaraderie and to get free food :-P). Indian restaurant owners (or the ones I knew anyway) were CHEAP as HELL. They cut every corner imaginable. The interesting thing about Indian restaurants (IMHO) is that they could be so much better, but the owners fuck it up by using lower quality spices and produce. My family often jokes about how money, not happiness, is an end goal for immigrants and 1st generation Indians. We joke, but it's a reality because restaurants are tough to make profitable, especially ethnic ones in towns that don't lean that way. Anyway, long story short, my gut tells me that they're shafting you on purpose, and that you should get a job somewhere else if you feel that you could make more elsewhere (which you certainly should be able to).
posted by SeizeTheDay at 3:25 PM on January 4, 2008

I was having an ikkuyu2 moment reading the answers to this thread.
How's that?

Several incorrect lay answers to legal questions. Nevermind, I should have have bit my tongue.
posted by ClaudiaCenter at 3:27 PM on January 4, 2008 [2 favorites has favorites]

Here's a link that discusses the ambiguity in the law.
posted by SeizeTheDay at 3:33 PM on January 4, 2008

Start politely telling your customers not to worry about a tip because the waitstaff does not keep tips. They will politely stop leaving tips, and when/if your employer begins to notice that you will have the perfect opportunity to explain the phenomenon of tipping to them. Of course, I'd have a backup job ready just in case they aren't particularly civil about it. But I'd say it is an easier way to deal with it than contacting the IRS, BBB, the news or God.
posted by greekphilosophy at 3:38 PM on January 4, 2008

Additionally, I had the reverse happen. I ordered food at a restaurant where the staff did not actually engage in any service outside of standing behind the register and calling your number out. Naturally, I didn't include a tip when I returned my credit card receipt, and the registerboy groaned and said, "Wow, buddy, thanks for the great tip." So obviously it isn't always just management who doesn't understand why and when people are tipped.
posted by greekphilosophy at 3:40 PM on January 4, 2008

Well, if you don't tell us, we're not going to find out which answers are incorrect. I know you have good reasons for doing this, but it doesn't really provide any enlightenment. Anyway, I feel that the general sense of the advice in this thread is that bookish should contact an expert, not rely on legal information here.
posted by grouse at 3:41 PM on January 4, 2008

Well, if you don't tell us, we're not going to find out which answers are incorrect.

Again, I'm really sorry, I was being snarky (which isn't usually me).*

Incorrect responses include, "it's certainly legal," "if they pay you regular minimum wage, they can and do keep tips," "If you are making $5.85 (or more) an hour, then they are likely not required to give you tips," "what they're doing sounds legal, because they're paying you the minimum hourly wage rather than the reduced wage that you'd get if you were keeping your tips," and "they probably know that this is a legal practice."

The OP must get paid minimum wage, and there are different rules on how tips play into that minimum wage. That question is separate from the question of whether a restaurant can keep tips.

*Plus I was cranky about the comment, "If it were me, I'd be happy I was being paid a real wage," emphasis in original, when the federal minimum wage is extremely low given changes in the cost of living.
posted by ClaudiaCenter at 3:57 PM on January 4, 2008 [3 favorites has favorites]

Also -- the interesting article cited by SeizeTheDay discusses the practice of pooling tips and tipping out non-waitstaff (such as bartenders), and whether or not that is legal. The restaurants are not arguing that they get to keep all of the tips (with waitstaff getting nothing).
posted by ClaudiaCenter at 4:01 PM on January 4, 2008

Thanks, ClaudiaCenter.
posted by grouse at 4:02 PM on January 4, 2008

I don't know the legality, but it definitely sounds crappy to me. I tip at a restaurant because of service. If I place an order for pickup, I don't tip because the person didn't do anything other than take my order. I tip because of the time and attention given at a restaurant by their wait staff. If I ever found out my tips weren't making it to the wait staff, I'd definitely be pissed and make a fuss.

Even if you worry about making a legal fuss in order to keep your job, I would definitely start making my way around the internet to various restaurant sites and spread the word. Because if you aren't getting the tips anyways, it won't hurt you financially!
posted by Becko at 4:14 PM on January 4, 2008

Does the local TV news station(s) in the nearest city have one of those "Consumer Watchdog" or "We're on Your Side" deals, where consumers call in to complain about how they've been ripped off and then the intrepid reporter does a cheesy investigative piece designed to generate community outrage and "right the wrong"?

Most local podunk news outlets have those segments, and this is JUST the sort of thing they love, at least here in Michigan. You need to frame it as the customers being screwed (which they are) rather than the waitstaff being mistreated (which you are).

Thank you for asking this question because I'm now going to quietly ask my next server at all the restaurants I frequent whether they receive (or fairly pool) tip money, and if not, I'm going to start yelling. Personally, I'd be thrilled if servers made standard minimum wage or more PLUS my 20-30%.
posted by FelliniBlank at 4:30 PM on January 4, 2008

>I don't know the owner's name or how to get in contact with him/her.

This is a matter of public record, somewhere. There has to be a sales tax license, perhaps an alcohol license, something on the wall that tells you who owns the place. If it is a corporation, your state has a record (available online) to tell you who owns the corporation. If it is an assumed name, this is on record at the county clerk's office.
posted by megatherium at 4:36 PM on January 4, 2008

desjardins: It's not a racial observation, it's a cultural one. I meant not that they have brown skin and dark hair, but that they are Indian immigrants that were born and grew up in the country of India. Like it or not, that definitely influences their behavior, values, and outlook.

I love India; I spent six months living there and have enormous respect for many Indian people. I also recognize that among a billion people, there is going to be as much diversity as there is consensus. But I still believe that there cultural tendancies, and that they are reflected in the management issues I'm having, something that has been confirmed by many Indian people I have told about my experiences working there. (A case in point being SeizeTheDay, upthread: I'm Indian. I frequent a LOT of Indian restaurants, and I used to make it a habit of getting to know the owners (you know, sign of camaraderie and to get free food :-P). Indian restaurant owners (or the ones I knew anyway) were CHEAP as HELL. They cut every corner imaginable.)
posted by bookish at 5:14 PM on January 4, 2008

Thanks, ClaudiaCenter. I feel like a jerk for complaining when people have taken the time to answer my questions. But it is frustrating when people give completely unqualified answers. Luckily I know not to take any real legal advice off the internet; I'm mostly looking to be pointed in the right direction as to where I can look up the relevent information myself and who to talk to about it.

And yeah, it's truly absurd to describe what I'm making as a "real wage." I'm a college student with significant debt from uninsured medical issues, and I am just barely scrapping by most of the time. Those tips would make a big difference to me: this is a nice restaurant and I see how much money people leave. Even if they weren't paying me at all I think I would make more on tips on an average night than I do in wage earnings. My fellow employees are mostly immigrants with families to support; they need the money too and I want to do something about this situation as much for their sake as for mine.
posted by bookish at 5:41 PM on January 4, 2008

Seconding the recommendation to just quietly and tactfully tell your customers that the wait staff doesn't receive tips, and as such that tipping isn't necessary. This will make sure that tips go to the right person: you, if the customer then opts to give you money directly at the end of the meal, or no one. Because the server (or her support staff, i.e. bussers) is the only person who should be eligible for a tip. A tip is based on exceptional service rendered by a person or persons. How the hell does a restaurant owner think he's eligible for the direct merit-based award that someone else earned?

That just makes me angry. I would never leave a tip at such a place, if I knew. Actually, I would never even frequent such a place, with that knowledge. I'm sorry for whatever circumstances keep you there. My advice would be to look for another waitressing position as soon as that's logistically possible for you. In my experience, your circumstance is the exception, not the rule.
posted by Brak at 5:44 PM on January 4, 2008

Go to Student Legal Resources for your college.

Also, they're defrauding you if they told you when you were hired that tips were pooled.

If and only if this is legal in your jurisdiction, I'd place a tape recorder in my pocket/phone, and get a manager on record answering the question:
"[Manager's Name], when I was hired, you told me tips are pooled. I've been here [x] weeks - when will I get my share?" Then you can use the recording as proof in small claims court or what have you, although it would be at the end of the job.

This is all subject what the lawyer/legal aide says.

Seconding the recommendation to just quietly and tactfully tell your customers that the wait staff doesn't receive tips, and as such that tipping isn't necessary.
I disagree - this is how you get fired / provoke a confrontation.
posted by sebastienbailard at 6:37 PM on January 4, 2008

I worked as a waitress as a second job for about 8 years. I really recommend that you do the research to find out what the employment law in your state says. You could even call a reference librarian at your local or county library; they could find it fast.

Tip and wage law does vary, and so does restuarant custom. Some customary things might not seem legal, but actually could be.

In some states, waiters and other restaurant staff get a full minimum wage, the same wage that is required to be offered at any hourly job - retail, administrative, whatever.

In other states, there is a separate minimum wage for waitstaff that is much lower than standard minimum wage. It's set lower on the assumption that waitstaff are receiving the remainder of their income in tips, which equals or exceeds the minimum. Here is Connecticut's standard, for instance: The regular state minimum wage is $7.65, while for waitstaff it is $5.41.

I don't know if that's the case in your state. I also don't know whether state law entitles you employers to take your tips wholly or require you to pool your tips. Here is a page of Google search results that shows that at least some states have ruled that employers can't take your tips.

Some restaurants have a custom of asking servers to pool tips (a system in which all servers put tips together, then divide evenly by the number of servers at the end of the shift)> Some restaurants (maybe most?) also have a custom of asking servers to 'tip out' their support staff - bartenders, bussers, food runners, bar backs - who do not receive tips directly. Again, not sure how the law views that.

I think you'll have to get specific answers for your own state. I agree that you'll end up talking with your employers about it if you decide not to look for another job, but it would be better to go into that discussion with your facts in hand. Good luck!
posted by Miko at 6:43 PM on January 4, 2008

[WHAT THE FUCK type answers sort of need to go into metatalk]
posted by jessamyn at 7:04 PM on January 4, 2008

I think kadin's point is really important to consider.

The real consideration for you is whether this is a battle worth fighting. It sounds like you may not want to burn your bridges at this place -- your resume / experience isn't strong enough for you to get a job without using this one as a reference, I suspect. (Or, put differently, it will help you substantially to have this place as a positive reference when you do go looking for another job.)

Think about this carefully. Sounds like you're not in a strong place finanically (student loans and medical bills) and you don't say specifically why else you fall into the category of "people who have difficulty finding jobs."

Even if you're correct (legally and/or ethically), it might be hard to stay in the job once you file a complaint or start telling customers about the tipping issues. It'll likely be an even worse work environment at that point, which can really poison your life. So keep that in mind as you choose how/when to move forward. And don't count on anonymity given that you've been heard asking so many questions.

Perhaps the best thing you can do for yourself is to build a strong work history and make yourself a more attractive employee for future jobs. It'll put you in a better place to fight the man, or better yet, you may no longer need to settle for crappy workplaces.
posted by quinoa at 7:23 PM on January 4, 2008

State laws do vary on minimum wage and the way that tips are or are not counted toward minimum wage, and whether various pooling arrangements are permitted. However, the federal law provides a floor, see here, and under federal law the employer cannot take the tips.
posted by ClaudiaCenter at 9:12 PM on January 4, 2008

under federal law the employer cannot take the tips.

That fact sheet says that tipped employees must be able to keep all tips. But it says tipped employees "are those who customarily and regularly receive more than $30 a month in tips." Since bookish does not get to keep any of her tips, she does not receive more than $30 a month and therefore does she really fit the definition of a tipped employee? 29 CFR 531.56:

An employee must himself customarily and regularly receive more than $20 a month in tips in order to qualify as a tipped employee. The fact that he is part of a group which has a record of receiving more than $20 a month in tips will not qualify him. For example, a waitress who is newly hired will not be considered a tipped employee merely because the other waitresses in the establishment receive tips in the requisite amount.

Also 29 CFR 531.55 says:

Also, if pursuant to an employment agreement the tips received by an employee must be credited or turned over to the employer, such sums may, after receipt by the employer, be used by the employer to satisfy the monetary requirements of the Act. In such instances, there is no applicability of the 50-percent limitation on tip credits provided by section 3(m).

Isn't that what's happening here?
posted by grouse at 3:38 AM on January 5, 2008

Isn't that what's happening here?

I don't think so. For example, as to the first, I think the DOL would consider the workers to be "tipped employees" if they would receive the minimum amount but for the employer wrongfully taking the tips. As to the second, I think that refers to the idea of an agreement that the tips be turned into the employer for crediting toward minimum wage, but the worker would still have to receive the excess. Also, under the facts here, I don't think there is any agreement such as what the DOL means -- there's no system wherein each worker turns in their tips so that the employer calculates the credit, but then the workers get back their tips in their check after the calculation.

But let me double check with my two colleagues who are wage and hour experts. (Wouldn't it be awesome if I were wrong? I'll have to MetaTalk myself for asshatness.)
posted by ClaudiaCenter at 3:03 PM on January 5, 2008

The language of the regs is clear as mud, at least on it's face. That is why you call the department and get a reading. They will know the proper interpretations. This is also what you pay for in an experienced lawyer. Any joe blow, and any joe blow lawyer, can read these things, but they are often not clear. Folks who have worked with them can give you the reading that has been accepted. If the issue involves lots of money or has other importance, then you want to get a lawyer who has these experiences and who can make a well reasoned interpretation which favors you. The department lawyer can say no, it goes against you, but your lawyer, if he/she has the background and skills can perhaps say that yes, under one interpretation it goes against you, but under another and supportable interpretation it goes with you, against them. Here it may not pay for that, and that is why I suggest you use the agency as your ally as they may even provide the pressure to get what you want. If you get the right person, they can even direct you to another person in a different agency if needed. Be friendly, and persistent, and hurt. Many of these folks take these jobs in part because they want to help, they want to help the workers who have been hurt. Good luck to you, and by the way, a wage slightly over minimum for waiting tables is not a good wage. They are screwing you. Waiting tables is really hard, and in the right places it pays. Get to those places. Think about it. If you get to work in a place where two people are spending $200 for dinner and spend two hours and pay a %20 tip that is $20 per hour per table, and you have lots of tables. That is serious coin, even with payouts and bad tippers. School teachers, young lawyers, programmers, most of them fall short of what a good waiter/waitress can pull down in the right place. You can make a stink, and if this is just a temp job, that is probably the best, or you can move on an basically find yourself earning almost as much, if not more, as your last boss.
posted by caddis at 4:02 PM on January 5, 2008

by the way, a wage slightly over minimum for waiting tables is not a good wage. They are screwing you. Waiting tables is really hard, and in the right places it pays. Get to those places.

I totally agree with that, and it's the truth. Waiting tables is supposed to pay well; the whole system rests on it. The point of using the tip system is to make the job attractive and provide incentive. It's difficult work, and takes some smarts and experience and the right attitude, an good places have good staff because it's a win-win situation. If you have other restaurant choices at all, you might do very well to work for one of them.

Meanwhile, my mind boggles at the legal question. I leave that for the smart minds that understand that stuff to tell what's what.
posted by Miko at 6:16 PM on January 5, 2008

In Bell v. Mynt Entm't, LLC, 223 F.R.D. 680 (S.D. Fla. 2004), the court approved a class notice under FLSA where the restaurant took a percentage of tips for "the house," meaning the employer itself plus management employees. The court-approved notice to potential plaintiffs stated:

Former server/waitresses and bartenders have sued Mynt Lounge, located at 1921 Collins Avenue, Miami Beach, Florida in federal court in Miami alleging that they were unlawfully deprived of tip and/or gratuity income as a result of Mynt's deductions from their earned tips and/or gratuities for the "House," or ownership of Mynt, which were retained by the "House," and for its management personnel. The bartenders also allege that they were required to work at private parties for which they were not fully compensated. The case name is Marcia Bell, et al. vs. Mint Entertainment, LLC., d/b/a Mynt and Roberto Caan, Case No.: 03-23190-CIV-JORDAN/BROWN

There is no substantive decision on the merits following the 2004 opinion, so the case must have settled.
posted by ClaudiaCenter at 4:12 PM on January 13, 2008

I can't find a free link to the above case (it's on Westlaw, LEXIS, Pacer, all of which require passwords).

Here are the lawyers who did the case (they might be willing to send you their materials or give you a referral to someone in your area):

Robert E. Weisberg
Kimberly Ann McCoy
Law Offices of Robert E. Weisberg
1450 Madruga Ave., Ste. 209
Coral Gables, FL 33146-3163
[phone]
Fax: [phone]
E-mail: [e-mail]
posted by ClaudiaCenter at 4:23 PM on January 13, 2008

Another case on tips -- Myers v. Copper Cellar. Not exactly on point, but good background information.
posted by ClaudiaCenter at 4:43 PM on January 13, 2008

Thanks for the interesting cases, ClaudiaCenter. I found this in the Department of Labor Field Operations Handbook §30d01(a):

[T]he effect of the language of Sec 3(m) precludes an agreement between an employer and a "tipped employee" that any part of tips received by such employee belongs to the employer and must be turned over to the employer. Further, the specific language added to Sec 3(m) reinforces the intent of Congress that an employee who receives $30 per month in tips is a tipped employee and that the employer and employee cannot agree to remove the employee from that status or agree to waive such employee's right to retain all tips received. Such an employee must retain all tips received from customers, whether in cash or through allocation by credit card charges¹, and in addition must receive remuneration from the employer for at least 60 percent of the applicable MW in the w/w.

29 CFR 531.52 says:

In the absence of an agreement to the contrary between the recipient and a third party, a tip becomes the property of the person in recognition of whose service it is presented by the customer.

Employment Standards Administration Opinion Letter FLSA2006-21 says:

The “third party” to which 29 C.F.R. § 531.52 alludes does not include the employer, but must be considered within the context of 29 C.F.R. Part 531 as a whole and FLSA section 3(m) as amended.

The source for that might be Richard v. Marriott Corp., 549 F.2d 303 (4th Cir.), cert. denied, 433 U.S. 915 (1977). I can't find a public source for it.

¹ §30d05(a) says that the USDOL will not question reductions in credit card tips paid if the deduction "is no greater than the percentage charged by the credit card company."
posted by grouse at 5:30 PM on January 13, 2008

The “third party” to which 29 C.F.R. § 531.52 alludes does not include the employer

Phew! Good to know the Department is construing the regulation is a reasonable fashion.
posted by ClaudiaCenter at 6:09 PM on January 13, 2008

I was in a similar situation at Tios Restaurant in Ann Arbor—tips go to the cooks and the managers, under the owner's assertion that no one comes there for the service.

I was, officially, barred from discussing this from customers (after a couple nights where I'd told people and the tip cup went empty).

I went ahead telling people, clandestinely, and told them that if they handed the money to me, I'd make sure it didn't go to the cooks (I had no problem splitting it, and often did when the manager Steve wasn't around, since it was mostly his coke habit that the tips supported).

Then Steve accused me of stealing from the till when he saw I had cash on me. Since I hadn't been, I kind of considered that the end point of our proscribed relationship. My tactic was to give people, especially regulars, as much free food as they could stand. Often, they'd toss me cash for doing so. I'd under-ring orders, or just bring out free drinks or whatever. I know it was "stealing," but fuck, if I was going to be accused of stealing, I'd steal and get away with it. Now that I have better employment options (and perhaps a more developed sense of morality), I'd probably just quit. But I wanted to point out that you have options, and to give a tacit warning to employers out there—there's no faster way to get your employees to steal from you than to take something they feel reasonably entitled to.
posted by klangklangston at 5:07 PM on January 17, 2008 [2 favorites has favorites]