You Work Hard for Your Tips – The Law Says You Deserve to Keep Them

If you work in a tipped position—like a server, bartender, barista, delivery driver, or hotel worker—you may already know that your tips can make up a major part of your income. What you may not know is that federal law protects your right to those tips, and your employer cannot take or improperly distribute them.

Under the Fair Labor Standards Act of 1938 (FLSA), tipped workers have clear rights. If your employer has violated those rights, you may be owed significant back pay, damages, and more.

What Tip Practices Are Illegal Under the FLSA?

The FLSA strictly regulates how employers must treat tips. Below are some of the most common violations:

(1) Employers Keeping Tips

Illegal Practice:  A manager, owner, or supervisor keeps all or part of your tips.

Example: A restaurant manager collects all credit card tips and only pays out part to the servers, keeping the rest.

Why It’s Illegal: Employers are never allowed to keep any portion of employee tips, even if they claim it’s for “house charges” or other fees.

(2) Forced Tip Pooling With Non-Tipped Workers

Illegal Practice: You are required to share tips with workers who don’t regularly receive tips, such as cooks, dishwashers, or supervisors.

Example: A server is forced to split tips with the kitchen staff or with a shift lead who does not serve customers.

Why It’s Illegal: The FLSA allows tip pooling only among regularly tipped employees. Sharing tips with non-tipped workers violates the law.

(3) Tip Credit Abuse

Illegal Practice: Your employer pays you less than minimum wage and takes a tip credit but doesn’t follow the rules.

Example: A bartender is paid $2.13 per hour but is also required to perform maintenance work for several hours each week with no tips.

Why It’s Illegal: Employers can only take a tip credit if:

• • You regularly receive over $30 per month in tips.
  • You keep all your tips (unless part of a legal tip pool).
  • You are engaged in tip-generating work.

(4) Withholding Tips Paid on Credit Cards

Illegal Practice: Your employer delays payment of your credit card tips.

Example: A delivery driver only receives tips once a month.

Why It’s Illegal: The FLSA requires prompt payment of all tips without improper deductions.

Consequences for Employers:

Employers who violate FLSA regulations risk legal consequences and financial liabilities, including the following:

(1) Back Pay:

Employers found in violation of FLSA regulations may be required to provide back pay for wrongfully withheld tips.

(2) Liquidated Damages:

In certain cases, liquidated damages equal to the amount of back pay may be imposed to further penalize employers for FLSA violations.

(3) Legal Fees:

Employers may be responsible for covering the legal fees and costs incurred by employees in pursuing legal action for off-the-clock violations.

(4) Civil Penalties:

The Department of Labor may impose civil penalties on employers who repeatedly violate FLSA regulations, serving as a deterrent against non-compliance.

We are Investigating Tip Theft Cases Across the Country

Tip violations are common in restaurants, bars, hotels, salons, delivery services, catering companies, and more. If you’ve been affected, you’re not alone – and you have legal options.

Free Case Review – No Fees Unless We Win

If you suspect your tips have been stolen or shared illegally, contact us now. It costs nothing to speak with us, and we don’t get paid unless we recover money for you.