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What service employees need to know about tips in 2020

A lot of industries include compensation through tipping. For example, if you are a waiter, then a lot of the money you make in any given night is handed directly to you by your customers. Since the tip is additional and is not a part of the actual bill, it is handled differently than regular income. 

Below are four key things that service employees should understand about tipping in 2020. If you don’t understand your rights, you will not be able to stand up for them:

  1. What are your employer’s rights to your tips? Your employer may not legally require you to surrender your tip money to managers or supervisors. However, they can require you to pool your tips with other service staff to make sure that everyone is paid fairly. For example, if you are a waiter who relied on a busboy and hostess to serve a table, you can be required to share your tip money with those team members. 
  2. How do tip credits work? The federal minimum wage is $7.25/hour, which means that you cannot legally be paid less than that. Your employer can account for your tips when it comes to paying you minimum wage. For example, an employer can take out a maximum tip credit of $5.12/hour. So long as you make up at least $5.12 in tips, your employer can legally pay you $2.13/hour for your service. 
  3. Do I have to pay credit card processing fees? If your customers leave you a tip on their credit card, your employer can legally deduct the amount of the credit card processing fee from your final tip, so long as you still meet minimum wage requirements. 
  4. What about service charges? If you work for a restaurant that charges large tables an obligatory 18%, your employer can legally take that money as a service charge. Customers may think you are getting that 18% as a tip, but you may never actually see it.

If you suspect that your tip income is being treated unfairly in your workplace, then contact the legal team at Grupo Via Dorada for help and representation. We can help you secure the income you deserve.