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? 

NNNOOOOOOOO! 

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!