Florida Tip Pooling Attorney

Tip pooling laws are filled with complex regulations and exceptions. Many employees are unaware of their rights and the regulations surrounding tip pooling and sharing. If you are earning your living through tips and there is a possibility they are being unfairly pooled or shared, you might be wondering where to go for answers.

But there is good news. You don’t have to navigate this alone. At Yormak Employment & Disability Law, we specialize in Florida employment laws, ensuring your rights are protected. Led by Benjamin Yormak, a board-certified expert who only works on employee cases, we can help you fight for what you rightfully deserve. Reach out to us for a free consultation today.

Tip Pooling is Legal in Florida

Tip pooling involves employers collecting all tips received during a shift or workday and then redistributing them among a group of employees. However, while tip pooling is legal, it must follow specific guidelines established by the Fair Labor Standards Act (FLSA). If your employer is not adhering to all tip pool guidelines, they may be violating your rights as an employee. Below is a breakdown of important laws regarding tip pooling.

• The minimum wage for employees in Florida as of 2023 is $12.00 per hour.
• Florida allows a tip credit against the minimum wage of up to $3.02 per hour making the minimum case wage for tipped employees $8.98 per hour.
• The employer must make up the difference if a tipped employee’s tips do not meet the full minimum wage.
• If an employer counts the tips their employees receive towards meeting the minimum wage requirement (known as  “tip credit”), they must inform the employees about how a tip pool works.
• Employees keep all their tips. However, the employer can require that the tipped employees share their tips with other tipped employees through a tip pool, but only with those who typically get tips.

The Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) is a federal law that sets the standards for minimum wage, overtime pay, record keeping, and youth employment. The FLSA provides the minimum standards, and states can provide additional employee protections.

Under the FLSA, employers can take a tip credit towards their obligation to pay employees the minimum wage. In other words, employers can pay tipped employees less than the minimum wage if their tips make up the difference.

The FLSA prohibits any arrangement between the employer and the tipped employee where any part of a tip pool becomes the employer’s property.

Tip Pooling Versus Tip Sharing

There is a difference between tip pooling and tip sharing. Both practices involve the distribution of tips among employees, but they typically operate under different systems.

Tip Pooling

At the end of a designated period (like a shift or a day), the total tip pool collected is divided among the employees, usually based on a pre-set formula. This formula might consider the number of hours worked or employees’ different responsibilities.

If an employer claims a tip credit, then only typically tipped employees can participate in the tip pool. On the other hand, if an employer pays minimum wages to all employees, they may request an arrangement where tips are shared among non-tipped employees, such as cooks and other staff.

Employers and managers may keep tips they receive directly from a customer for the service they directly and solely provide.  For instance, a restaurant manager who serves their own tables may keep their tips from customers they served but cannot receive other employees’ tips by participating in a tip pool.

Tip Sharing

Tip sharing often involves employees who receive tips directly from customers and then share a portion of their tips with their coworkers.

This is a less formal arrangement than tip pooling and might be based on agreements between employees. For instance, a waiter might give a percentage of their tips to the bartenders who helped them during their shift.

In some cases, employers may have policies that suggest or require tip sharing to ensure that support staff receives a portion of the tips, but it is generally more unrestricted than tip pooling.

The tipped employee often decides the amount shared and the recipients, although employers could provide a general understanding or guideline.

Common Types of Tipped Employee Disputes in Florida

Navigating tip-pooling laws can be tricky, and disputes often arise. Below are some common types of tipped employee disputes.

Minimum Wages & Overtime

Florida law requires employers to pay tipped employees a minimum wage of $8.98 per hour and that their total after-tip compensation has to be at least $12.00 per hour. If an employee earns less than $12.00 per hour they may be entitled to additional compensation.

Similarly, those who work more than 40 hours in a workweek are entitled to overtime pay at one and a half times their regular rate.

Tip Credit

29 C.F.R. § 531.59 determines that if an employer wants to pay less than the minimum wage by using employees’ tips, they have to follow the rules below and ensure the employees know about them.

• Before an employer can pay tipped employees less than the minimum wage, they must inform employees about how the tip credit works.
• The employer can’t claim a bigger tip credit than the amount of tips the employee earns. This means the employer has to pay the difference if the tips plus the cash wage doesn’t add up to the minimum wage.
• Employees get to keep all their tips, except when there’s a tip pooling arrangement.

Dual Jobs

If a tipped employee spends more than 20% of their time performing non-tipped duties, their employer cannot apply the tip credit for that time.

The employer must pay them at least the full state minimum wage for that portion of their work. This rule is often referred to as the “80/20 rule”.

The 80/20 rule ensures that tipped employees are compensated fairly for their time spent on non-tipped duties. It’s important to note that this rule applies to duties related to the tipped occupation.

Service Charges

If employers add a service charge to customers’ bills and distribute it among employees, this value is considered wages under federal law, not tips. This means employers cannot count service charges towards the tip credit, which must be included in overtime calculations.

It’s important to note that this distinction has significant implications for employees and employers. For employees, these service charges are part of their guaranteed income, as they are not dependent on customers’ discretion, unlike tips.

For employers, it means they need to factor these service charges into their payroll calculations, ensuring that they are accounted for when determining overtime pay and other wage-related calculations.

Credit Card Tips

If customers leave a tip on a credit card, employers must give employees the total amount. Employers can deduct a share of the credit card processing fee from the tip but no other additional fees.

Managers and Supervisors

Managers and supervisors cannot participate in tip pools, even if they provide direct customer service. They might be entitled to tips from direct service rather than to participate in tip pooling. If your manager or supervisor takes a share of your tips, it violates federal law.

Contact Us for a Free Consultation

Yormak Employment & Disability Law is committed to protecting your rights and ensuring you receive the compensation you deserve. Our team, led by Benjamin Yormak, a board-certified employment law expert, has handled hundreds of disputes related to wage and hour claims in Florida. We know how to identify violations of these laws and build a strong case to hold employers accountable.

If you believe your rights regarding tip pooling or sharing have been violated, don’t hesitate to contact us for a free consultation.