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Is it legal to require BOH tip outs?

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Question:

I recently started working with a company and a part of my tip goes to the kitchen staff, who are already making a salary wage. Is that legal?

– Anonymous Server, Livingston County, Michigan

Answer:

The federal Fair Labor Standard Act specifies that, “The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly receive tips, such as dishwashers, cooks, chefs, and janitors” (emphasis mine).

That said, there are exceptions to every rule. A big one is for back-of-house staff like sushi chefs or teppanyaki chefs, who have a lot of interaction with guests in the front-of-house. The US Department of Labor issued an opinion that they could in fact participate in the tip pool.

Another exception is that in the nine states that fall under the Ninth Circuit Court—Alaska, Arizona, California, Hawaii,  Idaho, Montana, Nevada, Oregon and Washington—cooks and other non-management employees are often included in the pool due to a 2010 ruling by the Ninth Circuit Court of Appeals, though this is still being contested. Most of those states do not have the tip credit (meaning back-of-house and front-of-house employees all make the same full minimum wage or higher), making it a bit easier.

Since you are not writing from one of those states, I do think you have some cause for concern. As always, operators should consult with an attorney and the state restaurant association as regulations do vary.

More on tip pooling rules from our friends at Avvo here.

We’re constantly monitoring developments on this topic. Stay tuned for updates.

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