For gig workers, tips aren’t just a bonus—they’re an essential part of income. However, the tipping system has become increasingly complicated, leaving many workers wondering if they’re receiving the full amount they deserve. Unfortunately, not all tips end up in the pockets of those who earn them.
Making sense of tip theft
A recent lawsuit against DoorDash highlights the issue of tip theft. The company agreed to pay $16.75 million to settle claims that it had stolen tips from its delivery drivers.
According to the lawsuit, DoorDash had been using tips to offset the guaranteed minimum pay for its drivers, rather than adding them on top of the minimum wage. This practice, known as “tip crediting,” is legal in some states like Michigan (for now), but it can leave workers with lower earnings than they expected.
What Michigan gig workers should know
While the DoorDash settlement applies to Washington, D.C., it has implications for gig workers nationwide, including those in Michigan. This case brings attention to potential issues in tipping practices and encourages workers to be vigilant about their earnings.
If you depend on tips, it’s really important to understand your rights. In Michigan, employers must pay you the tips you earn, though they can claim a tip credit provided they notify workers of this practice in advance.
To ensure you are collecting the full compensation, including tips, to which you are entitled, take these steps:
- Keep good records: Track your hours, deliveries and the tips you receive. Screenshots or a simple spreadsheet can be very helpful.
- Review workplace policies: Carefully read your company’s policies on wages and tips. Pay attention to any changes or updates.
- Speak up: If you have questions or think something is wrong, ask right away. Don’t wait until the problem gets bigger.
As the gig economy continues to grow, so does the importance of fair tipping practices. The DoorDash settlement serves as a reminder that workers have wage rights, and companies must respect those rights. For Michigan’s gig workers, staying informed and proactive about tipping policies is key to securing their financial well-being.