Is Your Tip Pool a Potential Lawsuit?

At the outset, I want to note that this article is not intended to provide a comprehensive overview of the legality of tip pools. Instead, this article is meant to make employers aware of one way in which tip pools have been challenged in recent years.Under the Fair Labor Standards Act (FLSA), mandatory tip pools may only include employees who “customarily and regularly receive tips.” Although this concept may appear simple,

Key Takeaways:

• Under the Fair Labor Standards Act (FLSA), mandatory tip pools may only include employees who “customarily and regularly receive tips.”
• If a tip pool includes employees who do not customarily and regularly receive tips, employers are required to pay all employees in that tip pool the minimum wage of $7.25 per hour.
• How do you know if an employee may be included in a tip pool? As mentioned above, the amount of time an employee directly interacts with customers is the most important factor.

“How do you know if an employee may be included in a tip pool? As mentioned above, the amount of time an employee directly interacts with customers is the most important factor. Nevertheless, courts have identified certain duties that can be helpful to determine if a position may be included in a tip pool.”

https://www.fsrmagazine.com/kitchen-sink/your-tip-pool-potential-lawsuit