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Working for Tips – What are my Rights?

Legal Rights in the Service Industry: Understanding Tip Pooling Laws

If you work in the service industry, you likely receive a substantial portion of your income from tips. It’s important you know your legal rights when working for tips. Customers give tips directly to the employees as consideration for their services, and it is illegal for an employer to take a portion of those tips or require you to share them with non-tipped employees. Many employers have recently been hit with lawsuits alleging illegal tip pooling.

The Legality of Tip Pooling

Many states allow employers to pool tips. It is a common practice in the service industry and perfectly acceptable so long as it is carried out in accordance with the law. Your employer may require you and coworkers who receive tips to contribute them to a pool which is divided up among some employees. While an employer may pool and redistribute tips, not all employees are entitled to collect from the pool. While the distinction is not always clear, generally an employee is only entitled to a share of the tip pool if he provides a direct service to customers. Service workers who do not provide a direct service to the customers and do not regularly receive tips are not entitled to receive payments from the pool.

Employer Restrictions

Only employees are entitled to money from the tip pool, employers are never allowed to participate. Even if your employer tends bar, waits tables, or otherwise works in a position that ordinarily receives tips, he cannot simultaneously be an employer and a tipped employee entitled to a share of the pool.

Distinguishing Between Tips and Service Charges

It is important to distinguish between a tip and a mandatory service charge often added to bills for large parties. While the customer may believe that this money is going directly to you, and many employers do give a portion to the staff, you have no legal right to that money.

What to Do if This Happened to You

If you work in a restaurant, bar, or other service job in New York or New Jersey and your employer has violated wage and hour laws, you may be entitled to recover the money that was taken from you. If you believe your employer has forced you to participate in an illegal tip pooling scheme, please contact the Law Offices of John J. Zidziunas & Associates to discuss your rights. The law prohibits employers from firing or retaliating against workers who bring illegal activity to light, so please do not hesitate to contact our experienced New Jersey & New York tip pooling lawyers. For further information, please feel free to Contact Us to schedule a free consultation.

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