Management CAN NOT take your tips!

Those of you who are servers or tipped employees have no doubt been in a situation where a table walked out on all or a portion of their tab.  Some places are really cool about this and life goes on, but others will try to hold the server responsible and demand restitution of the lost money.  Is this legal?  Find out after the break. In 99% of the cases, this is ILLEGAL.  One of my favorite blogs, Consumerist, ran a story about this recently and spoke with a Department of Labor representative who confirmed this.

A rep for the Division explained that, according to Sec. 203(m) of the Fair Labor Standards Act [PDF], tips are to be fully retained by the employee, except in those cases where there is a valid tipping pool shared by multiple employees.

“Beyond that, tips are the property of the employee and an employer cannot require an employee to turn over any portion of them to the restaurant,” explains the rep.

So if, as per the example situation we presented, the waiter depends on his tips to meet the minimum wage, his employer can not deduct anything from his wages or tips?

So there you have it.  If management tries to take your tips, report them directly to the US Labor Department.  Of course, you could tell them politely that what they are attempting to do is illegal and that you will report it if they attempt to follow through, but in my experience, this just leads to further issues down the road.  By reporting them without telling management first at least gives you a few days to find a new job before you are cast out on the streets.

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