Tipped Employees Under the Fair Labor Standards Act
Definition of a Tipped Employee
An employee is considered to be a tipped employee if they customarily receive tips and receive more than $30 per month in tips on a regular basis. Tips belong to the employee; the employer cannot use them for anything other than for tip credit when calculating their minimum wage amount or in a valid tip pool. The only tips that count when determining if you are a tipped employee are the tips you actually receive.
State and federal laws regulate how a tipped employee is paid. If you have been misclassified as a tipped employee and are not receiving the fair minimum wage you deserve, or if your employer improperly calculated your overtime pay or is not operating a tip pool correctly, then you may be due back pay. At the Bayless Law Firm, attorney Kay Bayless applies her years of experience in West Virginia labor and employment law to help workers who have been underpaid recover back wages and other monetary damages that may be available to them. Contact Kay Bayless today to find out if you are being unfairly denied wages that you are entitled to.
Tipped Employees & Tip Credit for Minimum Wage
In West Virginia, employers who are allowed to take a tip credit are those who have six or more employees in any one location. Employees of any state agency also qualify for the tip credit against minimum wage. Under the Federal Fair Labor Standards Act, an employer can take a “tip credit” which allows them to pay a lower minimum wage to tipped employees. Under the federal regulations, an employer can pay a minimum wage of $2.13 as long as the tips the employee gets make up the difference between that amount and the federal minimum wage. If the amount the employee makes does not add up to at least the minimum wage, the employer must pay them the difference.
In West Virginia, the minimum wage is $8.00, and the maximum tip credit an employer can take against the minimum wage is 70%. The minimum cash wage is $2.40, and will go up to $2.62 as of January 1st, 2016.
If an employee has more than one job with the same employer, and only one of those jobs is a tipped job, the employer must pay the full minimum wage for the hours worked as a non-tipped employee. For example, if you work as both a waitress and a dishwasher, you must be paid the full minimum wage for hours worked as a dishwasher. However, if a tipped employee spends some time completing tasks related to their tipped position, the employer can take a tip credit for this time. For example, a bartender restocking bottles of alcohol and wiping off the bar and occasionally (not more than 20 percent of the work week) washes dishes like glasses for the bar, is still performing their tipped position job.
All employees must be allowed to keep their tips because their tips are their property, and an employer cannot require them to turn their tips over to the employer. However, the employer may have a valid tip pooling or sharing agreement among the employees who usually receive tips, such as waitresses/waiters, bartenders, bussers, bellhops, porters, skycaps, and so on. However, the tip pool cannot be shared with employees who do not usually receive tips, such as janitors or dishwashers.
Employers must also notify employees orally or in writing of information regarding tip credits and tip pooling. They must also notify the employee of any required contribution amount. The employer cannot take a tip credit for amounts that the employee does not actually receive in tips. If an employer fails to do so, they cannot use the tip credit and must pay the employee the full minimum wage while still allowing them to keep all the tips they received.
Common Violations Employers Commit Regarding Tipped Employees
- An employee is paid no cash wage, but is paid only in tips.
- Deductions for dine and dash customers, broken dishes, or cash register shortages which reduce the employee’s wage below the minimum wage; these deductions are illegal. Tips cannot be used for these types of deductions.
- Tips are shared in a tip pool with non-tipped employees.
- Overtime is calculated on the lower “tip credit” minimum wage amount. Any overtime must be calculated on the full minimum wage required by law.
Get Help Today From an Experienced West Virginia Attorney
Are you receiving all of the pay to which you are entitled? If you believe you have been underpaid, contact the Bayless Law Firm for a free consultation. You may be entitled to recover several years’ worth of unpaid wages. However, if you wait too long, your right to recover unpaid wages may be lost. Contact attorney Kay Bayless online or call (800) 359-2356 to find out whether you are being paid fairly or not.