UnderCover Waitress: Against Federal Law

Friday, January 25, 2013

Against Federal Law

Ask the Waitress!

My annoyance is with restaurant owners, not my readers who write in the... same... damn... question... 

Is it legal to be required to tip out the back of the house? 


And the fact that so many servers keep writing with their stories of having to share tips with BOH tells me a lot of owners are bloody ignorant, criminals, or both. Remember: ignorance is never an excuse for breaking the law. People are required to educate themselves about the law. For example, if you don't know what a "yield" sign means, and you don't yield, you get a ticket. If you own a restaurant, and you don't know how to create a legal tip pool, you are responsible when you break the law.

The Department of Labor's Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) spells it out plain and simple; the emphases are mine:

Tipped employees are those who customarily and regularly receive more than $30 per month in tips. 
Tips are the property of the employee. 
Tip Pool: 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 received tips, such as dishwashers, cooks, chefs, and janitors.
And, my favorite: 
Where a tipped employee is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, the employee is owed all tips he or she contributed to the pool and the full $7.25 minimum wage.
Did you get that? Employers who get caught owe you all of the tips plus full minimum wage.

Specific Questions

Let's talk about some specifics that people have written to me about:
I work as a server... We are required to tip out10% of our tips to the back of the house. The cooks and dishwashers each get an equal part of that %10. Is that legal? 
Okay, class, who wants to answer this one? Raise your hand.
Also...when the assistant manager bartends and acts as manager on the same night, she requires a tip out on our liquor sales. Is that legal?
This one is sticky. The Utah Administrative Code does not preclude management from participating in a tip pool, only clarifies that tip sharing must happen among employees that customarily receive tips, such as bartenders. In some states, management may not take tip outs, in others, this is legal. Therefore, I think it is legal, but you may check with a Utah lawyer to make sure. (I'm just the stupid waitress.) ;-)

Along the same lines:
Is it ok for the owner, her son,(mgr) and his fiance(mgr) to share evenly in the tip pool? even if they only work behing the bar?
Eww. It is grossly unprofessional and inappropriate for the owner of a business to take tips. This is because the owner has the power to set prices, salaries and wages. But the question has to do with legality, not ethics.

1) Depending upon the state, managers may participate in tip pools when they work as bartenders or hostess or other FOH duties. (See above.) 

2) There is no federal limit to what percentage of the tip pool a bartender may take. Some restaurants limit tip outs to the bartender based upon liquor sales, but this is not required. So, a bartender sharing evenly in the tip pool is legal under federal law. 

3) An owner taking tips...??? Gah. If you are working in a state that allows a manager to participate in the tip pool (when working FOH duties) then I suspect it is also legal for the owner. 
I work at a sushi and hibatchi grill and I am required to tip out 40% to sushi chefs, bar, host , dishwasher, and cooks in back of house, I want to know if it is legal for the owner to take a percent of our tips and pay back of house their salary with these tips.
This is also sticky. Are the chefs interacting with the customers in the front of the house? Or are they just preparing food? If the chefs are on the floor putting on show for the diners, then it may be legal -- I don't know, and an expert should research this one. 

Tips going to the dishwashers and cooks in the back of the house = illegal, plain and simple. 

Just because a restaurant has an open kitchen, meaning the diners can see the chefs, does not make them tipped employees. Also, the federal wording is specific about chefs not being in tip pools... If the sushi chefs are at a bar serving customers (like a bartender) then I am not sure. This is an excellent question but I am stumped; you should talk to an expert in your state. 

A Word of Caution About Complaining

If you complain directly to your manager about an illegal tip pool arrangement, you may be fired and have no recourse. 

If you are required to pay into an illegal tip pooling arrangement, please contact your state's Attorney General or speak to a lawyer. Or write to me and tell me which state you are working in. 

Thanks for asking the waitress! 



  1. Crazy, I worked a job in a small college town where they required us to tip the kitchen. I had no idea that was illegal. Also, if we got busy one of the managers would jump in and take a table or two of ours; I knew this WAS illegal, so shady.

  2. Already asked this in an earlier post today, but it seems somewhat related. Bussers at my restaraunt are paid min wage, no tips. However, when there is a busser working, all servers are required to pay the front of house 10% of tips. The explananation ive received has been that the 10% is meant to help pay for the bussers wages, but this seems like wage theft to me. Again, the busser only receives minimum wage as compensation. Im curious to know the legality of this practice.

    Written from work on a slow day,

    1. Hi, Dan! Sorry your day is slow. I think I also just answered your earlier comment (on "Busser Tip Outs," but will do so again: Yes, it is legal. Bussers are FOH employees who are allowed to "participate" in a tip pool -- "participate" = you pay them tips. The wage the busser is paid is separate from whether or not you have to pay them tips; a dishwasher may make the same wage, but you do not have to pay the dishwasher tips.

      Another explanation is that it provides extra incentive for bussers to work quickly and efficiently: if they help you get tables turned, you take more tables, you earn more tips so they earn more money, as well.

      Hope your day picks up! :)

  3. Actually, bussers dont get the tips. They simply get the flat min wage. The explanation ive received, again, is that the 10% helps to pay for the 7.25 an hour they get just for being here. There's no incentive at all. Dont know if that changes anything, but bussers do NOT receice tips, though servers still have to pay 10% of their tips if there is a busser on staff.

    1. Based solely on what you described, that does sound like wage theft! And you just gave me my next blog post. You might want to run this scenario by an expert in your state. As you know, I'm just a stupid waitress. :-P

    2. Any ideas who I should contact in PA about this?? Not even sure what to google to get on the right track - also, looking for a new serving job! But that doesn't mean I don't want the other servers at my restaurant to get their due justice, too.

      Chillin' on my day off,

    3. Dan, give me a few days-- I am in class tonight and tomorrow. I will get back to you via my next blog post in the next few days, today is 1/30/13.

    4. No problem! I really appreciate all of the help. Every server I know needs to read this blog.


  4. Sorry for the redundancies in my last post. Things picked up and i am very sleepy. Though i love your blog and will be sure to bookmark it!

    Busier than before,

  5. Ill double check my next paycheck - i work one day a week as a busser at my new job. Will get back to you with an update. Thanks so much for help!

  6. The owners need to have Fluffy, Destroyer of Worlds sicced on them.

    Or Grumpy Cat.

  7. Wow, your blog is awesome. Thanks for your hard work. Although my already recently challenged morale just sank a little lower. (I used to like my job!) Please direct me to any previous posts for anything in my comments below that seems to solicit info already covered.

    In my state, tipped minimum and regular min are close so there is little risk of an employer needing to cover the difference, even on a slow day, although it could get close in some cases. Rather than keeping close track of everything, which is totally daunting to me, I slightly under report cash tips to compensate for tip outs and the like when I serve (I don't think it's wise to go too crazy with this since that's my own SSB/SSI/SSD and even Unemployment potentially affected, right?). I also still bus from time to time. My work has a policy that employees must declare a minimum of $10 in tips on the POS "in case of an audit" that could reveal the under reporting. However, I think this has more to do with the minimum wage issue and protecting the employer, not the employee.

    I guess my questions on this are:

    If I bus and don't get tipped out till three days later (they are turned into management) how can I declare them at the end of my shift? I don't know how much I'm going to get.

    If I serve and it's dead, the bartender might just get a dollar from me (rounding up, which brings up another issue...). I'm not sure they would make min wage, but I feel like there's a subconscious attitude that ignorance of the law increases job security. I feel young, new employees have a right to know the law, but I'm new myself to the industry and feel unsure what to keep my mouth shut about.

    We tip out 1% of sales to the line cooks (but not anyone else BOH?) but this does not get routed through management. I don't get why that would be, but does that sound sketchy? I thought it was just because they have one of the cooks do the math on those tips, but that was before I knew it was illegal for them to take our tips.

    What's the best way for me to keep track of everything? Rather than underreporting to try to make up for tip outs, I'd like to at least consider tracking everything correctly, but I don't know how.I have learning disability and finances are crazy confusing for me. I'd like to avoid the issue that servers at my work are declaring and paying taxes on tip outs over 5% of sales, which are then being declared again, at least in part by bussers, etc (right? or am I crazy?).

    I don't want to be the one to complain about tipping BOH, but if it ever comes up that someone does, and the owner has to pay it back, what documentation will I need? Is it enough that sales are in the computer and they had a policy of taking 1%? Or do I need my own records?

    How do I know the tax rate being deducted from my check? I have no idea what it's based on (other than, ya know, "tips").

    I feel like I read conflicting info here about management getting tips. Overall, I sense it's a gray area, but I don't really get why as a manager is not a traditionally tipped position, even if they also do work other employees might do. The dynamic of a "Manager" making $8/hr wages and the majority of earnings coming from subordinate employees, who she has the right to fire (been done) seems really off to me. Once you are hiring, firing and setting wages, I don't really care if you show some people to their table to keep from standing around looking like an ass. Whatever.

    Finally, kind of an aside. We have to tip out a pretty high percentage to a support FOH person who is only marginally helping us out, and is actually not even always on the premises as her primary duties are elsewhere and don't involve providing service to restaurant customers. I don't get this at all. How can this be ok/legal?


Please share your thoughts.