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What should employers know about tips?

On Behalf of | May 25, 2021 | Employment Litigation

Some jobs come with the expectation of tips. Servers, for example, often make a low wage and need to earn tips to meet the minimum wage. In Florida, tipped employees must make $5.63 per hour or more as their base pay. The state minimum wage of $8.65 per hour. The remaining $3.02 per hour to get to that minimum would come from tips,

Employers with tipped employees should understand how the wages for those employees work. There are several points that are critically important if you’re running a company with tipped employees.

Who “owns” tips?

Tips are considered the property of the employee who earned them. It’s possible for a company to have a tip pool that averages out the tips for all tipped employees on a shift. However, the pool can’t include any employees who aren’t classified as tipped employees. This means that servers won’t have to pool their tips to share with dishwashers or cooks.

What happens if servers don’t earn enough in tips?

It’s up to the employer to make up the difference between the server’s base hourly pay and the minimum wage if the server doesn’t earn enough in tips to reach that minimum. Employers should ensure that they have a way for tipped employees to account for the amount they earn in tips each shift.

Disputes related to tips are often complex. If your company is facing claims regarding tips earned by tipped employees, such as assertions that a tip pool isn’t legally valid, working with an experienced attorney is important. You have to do what’s best to protect your company in these cases.