Tips Belong To You - Your Tip Rights
Did you see the news that Starbucks must pay $85 million in wronfully-withheld tips? The coffee giant forced its California employees to share tips with shift supervisors, violating California law. Now Starbucks has to pay these tips back to the barristas.
With this news, it’s a good time to examine what rights tipped employees have.
Fair Labor Standards Act
State laws vary widely on this subject, and Virginia offers virtually no protection at all for tip compensation. So we should look at the applicable federal law.
If your employer is covered by the Fair Labor Standards Act (FLSA), you have certain rights to your tips. The FLSA generally applies if the overall yearly business is more than $500,000.
Tip laws
To answer many of the common tips questions, the U.S. Department of Labor has a handy fact sheet (PDF). Here are a couple important points to remember:
Tip pooling - Tip pooling is allowed, but only among employees who “customarily and regularly receive tips.” The fact sheet specifically says that employees like “dishwashers,” “cooks,” and “chefs” cannot share in a tip pool. In the Starbucks case, California has a law that salaried employees can’t share in the tip pool.
Employer can’t share - Your tips are yours. They can be pooled among other workers, but no part of your tips can become the property of your employer.
Credit card fees - If someone tips you using their credit card, your employer can deduct the credit card processing fee from the tip you receive. But this only covers the actual credit card fee.
Your remedies
If your employer has violated the Fair Labor Standards Act, you have two possible remedies.
1. You can file a complaint with the U.S. Department of Labor by contacting your local Wage and Hour Division office. For help with a complaint, call their help line: 1-866-4USWAGE.
2. You can also file a civil lawsuit. You can claim two years of back pay plus that same amount as liquidated damages, and you can recover attorney’s fees and court costs.
Photo by MReece
