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The nuances of tipping laws

On Behalf of | Feb 8, 2018 | Employment Law

Many Detroit, Michigan, residents frequent restaurants when they do not have time to cook, or they just want to go out and have a good time. At the end of the meal, they will probably leave a tip.

What some people do not know is that these tips can be considered part of the server’s wages, meaning that an employer can add them in when figuring out whether the employer has paid the required minimum wage to the wait staff.

There are certain restrictions on employers when it comes to deciding what to do with a server’s tips. Until recently, the rules required them to forward the tips to the server who earned them. Now, the new Administration is deliberating whether to allow some employers to collect and pool the tips of their servers and split them with cooks and other staff in the restaurant. Alternatively, the employer can elect to pocket the tips as extra revenue.

This new rule would only apply when the owner of the restaurant paid minimum wage to its servers without regard to whether they made any tips. Otherwise, the employer would have to make sure that a server’s tips and base pay equaled, at least the hourly minimum wage.

As is the case in other situations, when an employee is not paid under a traditional hourly or salary scheme, figuring out how to apply wage and hour laws can be complicated, which means that it is easy for an employer to violate the laws and underpay their employees. When this happens, an employee may have legal options and should consider speaking with an attorney with experience in employment law.