Under federal and Virginia law, tipped employees can include servers, dancers, baristas, housekeepers, and any other employee who regularly and customarily receives more than $30 in tips a month.

If you are a tipped employee, under certain circumstances, federal law allows your employer to take a “tip credit” with respect to your compensation. Taking a tip credit means your employer pays you a base wage below the federal minimum rate. Your employer can do this if it notifies you it is taking a tip credit and provides you with required information, and pays you at least a special sub-minimum wage base rate per hour.

A tip credit only allows your employer to pay a sub-minimum-wage base rate if you make enough tips that, when your base rate and your tips are added together, you make at least the federal minimum wage per hour for each week you work.

This means that in weeks when business is down and you make few tips, your employer may need to pay you a higher base rate to make sure you make at least minimum wage for the week.

Sometimes, employers fail to ensure tipped employees are being paid at least minimum wage. Sometimes, employers take a tip credit without providing the required notice and information about the tip credit. Sometimes, even though tips exceed the minimum wage, employers even fail to pay tipped employees a base wage. All of these things are illegal.

A “tip pool” refers to any kind of arrangement where an employer keeps tips or distributes tips among employees. The law has specific rules governing the categories of workers with whom an employer can require you to share tips. 

These rules can be complicated and employers frequently violate them. For example, an employer could violate your rights by allowing a supervisor or manager to keep any part of your tips, or by requiring you to share your tips with employees who are not customarily tipped, like cooks and other back-of-the-house workers.

These practices are forms of wage theft. Attorney Tim Coffield fights to make sure tipped employees receive all the money they earn. If you believe your rights as a tipped employee have been violated, contact Tim to review your situation.