Question:
Is an owner allowed to charge you 2% of your total sales for a “house” fee from tips and pocket the money?
– Shae, Bartender, Decatur, Ga.
Answer:
No, at least not at the moment. The Department of Labor specifically states, “A tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA (Fair Labor Standards Act) prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.”
This topic is important to revisit this week, however, as the Trump administration is proposing new tip pooling arrangements that would allow for tipping to back-of-house employees and others who are not customarily tipped, provided employers don’t take the tip credit (meaning they pay everyone full minimum wage or higher). This is a controversial proposal. Some feel that not taking the tip credit and including the back of house in tip pooling could go a long way to mitigating the long-standing wage disparity between the front and back of house. Othersare concerned that the proposed legislation would open the door to employers not simply administering the tip sharing between all eligible employees, but indeed keeping a percentage for themselves.
As always, consult with your attorney and/or local restaurant association to be sure you’re in compliance. Laws vary by state and municipality and there is frequent change lately. It is also important to know that at the time of publication, the comment period for this proposed legislation is open. More on valid tip pooling arrangements here and the proposed legislation here.