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Tips are considered to be normal wages owed to employees much like their rate of pay would be. A worker and an employer must agree to the deductions in advance and in writing. Any deduction or failure to pay tips cannot reduce the workers final check below the applicable minimum wage.
The basic rule of tips is that they belong to employees, not the employer. Employees can't be required to give their tips or any part of them to the company, except as part of a valid tip pooling arrangement. If you were to do this, you would need to make sure that you had such a tip pooling arrangement in place, and that the tips were equally distributed amongst people who normally would receive tips.
If you did this, then you are fine.
Does that make sense?
So, in short, if you are using this as a punishment, or if you are not paying this person minimum wage through the use of a tip credit, then you cannot do this. If in writing in your manual it specifically addresses this issue, then you are fine. However, you state that in your manual it addresses what it means to be tip pool eligible. While this likely protects you, it completely depends on exactly what is said. If this person is working, and you are taking their tips, then you are in the wrong. If this person walked out, and you take their tips, then you are in the right.
So, when you state that this person is not tip eligible for an entire week, if this person continues to work, then this would be seen as punishment, and would be seen as taking their wages. In this situation, they could make an unpaid wage claim against you, and they would prevail.
Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further. If you do not require any further assistance, I would be most grateful if you would remember to provide my service a positive rating, as this is the only way I will receive credit for assisting you.
Have a wonderful rest of your day.
It is still very gray to me. I do have a tip pool set up and every one signs that they have read. This is a copy:
D) Wage Guidelines
Here are a few general guidelines that deal with wage rates and pay increases.
1) Each new employee will be hired with a 30-Day training wage, at which time their salary will be evaluated.
2) After completion of Step #1 – there will be no pay increases for the duration of one year.
3) Annual employee evaluations will be conducted to determine if a pay increase is in order.
Your pay period is every two weeks Monday thru Sunday. After Sunday closes, Monday the payroll is run. Payday is every other Thursday. Your check can be picked up between 2 and 4. They do have to be picked up at the office. We will not send out any pay checks. We highly recommend getting direct deposit. Talk to the accountant for your paperwork. You are still able to pick up your pay stub at the office during the office hours, but will get paid no later than Thursday.
In our industry, there are many functions at which the employees will be offered a “tip” for exceptional service. The following are guidelines that govern the distribution of tips and their reporting with Essence of the Thymes Catering:
1) No tip is “automatic.” Each employee must EARN their tip by working hard, following directions, being respectful to the client, the guests and their event supervisor. It is at the SOLE discretion of the PIC of the event whether an employee has earned a tip for that event. Any behavior that is prohibited by Essence of the Thymes guidelines will automatically cause an employee to be ineligible to receive tips.
2) ALL TIPS ARE POOLED. At Essence of the Thymes’ functions, all tips are pooled and divided among ALL employees (that have earned a tip) that are working in that pay period. It would be unfair to the dish pit crew or loaders, who have worked as hard as the entire crew, to not be tipped simply because they were not visible to the clients. This includes tips collected by the bartenders, valet parkers, servers, on site chef, PIC, etc. At Essence of the Thymes, we are a TEAM, and each event is handled by a TEAM. We all work hard, and we all deserve to be fairly compensated for our exceptional work.
3) All tips, including those from the bar, received in cash, check or credit card form will be divided weekly between all eligible employees and added to your normal payroll check. If you are on payroll that week you are eligible for the tip pool.
4) The tips are divided by your tip share. All employees that work the event get one full share and employees that worked on the events, but were not at the event, get a half share of the tip pool. Employees in their 30 day training wage will receive a half share of the tip pool.
5) All tips are divided through payroll. Only payroll employees are eligible. Cash tips received at the event whether slipped into your pocket, in an envelope, etc. must be turned into the PIC prior to leaving. The amount gets written on the clock in sheet by the PIC and the accountant divides it up appropriately.
6) Policy for tips sent in after the event: If a tip comes before Monday, it will still make it on the correct pay period. If the tip is given after the pay period is closed, then the accountant will issue the tips on the following paycheck, but with the correct eligible employees.
7) 6) Tip Jars: It is a reasonable expectation to both bartenders and bar patrons for the bartender to have available a “tip jar” for their exceptional service. However, due to the nature of our business, a “tip jar” on the bar would be either an insult to the client, or in poor taste. It will be at the discretion of the PIC whether the bartender will be allowed to make available a “tip jar.” In general, Essence of the Thymes catering prohibits the use of a tip jar since the client has provided/supplied the alcohol. No bartender will make a tip jar available without an express permission from the PIC, and when used these tips WILL be included in the pool of tips from other sources for the evening.
Please give me a few moments to read this. Additionally, during the week where she is not tip pool eligible, is this person working through the rest of the event?
I guess that it can be considered a punishment but I saw it as unearned since she did not hit the requirements
She did not complete the event
Actually, upon reading your policy, there are a number of problems.
While I realize that you are trying to do something that is fair in this regard, it does not necessarily mean that it is legal.
Please read the following document put out by the department of labor.
In short, it very clearly states that any valid tip pool may not include any employees who do not customarily and regularly receive tips.
I agree with you that you all work hard, and that everyone should be compensated, but unfortunately, that is not how the law works.
Are you referring to the dishwashers/loaders etc?
basically anyone who would not normally receive a tip
Please tell me if that clears it up for you or if it makes you more confused and why
Our business is unique in the sense that laws are written for restaurants with normality. With our business, it is not customary or regular, we are all caterers, Everyone serves, dishwashes, loads, and it is up to me (the one scheduling to decide what they do that day). Which to me (and them) would end up feeling like punishment to do those un tipped jobs.
The types of people covered would be those who would fall under this category "Cash tips received at the event whether slipped into your pocket, in an envelope, etc. must be turned into the PIC prior to leaving."
so if they would fall in that category, they can receive a tip.
If you give them a floating job, that allows them to be in that situation, they can receive a tip
Does it make a difference that for this specific case that it was not handed to the employees, but added to the final bill and given to the PIC (which was not the employee were talking about).
No that makes no difference. It does not have to be handed each time, just that they would be of the type of employee that can be handed a tip
So, if working, and they fall under that category, then they must be part of the tip pool
you cannot deny them that. However, if they were to walk off, then they could be denied for that day
Ok I super appreciate this! Is there any recommendations you have for making changes to the manual to keep it fair but legal?
Just make sure you define who can get tips, and specifically reference events such as this, where an employee can loose their right to the tip pool if they leave early.
You can use the link I gave you to the DOL as a good guideline.
Does that fully answer your question today? If not, please do not hesitate to ask any other questions you have especially if you need clarification on anything i have said. I strive to provide excellent service, so I want to make sure that you feel you have been provided that before you leave today.
You were great! Am I over stepping by asking if you have any reference for an attorney in the Port Orchard WA area in business law or employment law
Unfortunately, providing a direct referral is against the terms of service of the site, however, if you decide to hire an attorney a great resource is www.Martindale.com. This is a nationwide directory that is useful in finding highly qualified legal specialists in various fields of law. The lawyers in Martindale are not selected because they paid to be included, but rather because they have been rated by other attorneys as qualified experts in their field. Consider consulting with two or three different attorneys willing to take your case prior to selecting the one you feel most comfortable with.
Or I should not say take your case, but rather, do whatever it is you need them to do :)
Perfect, I don't have a case at this time :) Just need constant assistance with the clarification of the law. Thanks again
Not a problem. Have a wonderful rest of your day.
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