Pay & tips

Problems about pay, tips, wage theft, and how earnings are calculated and distributed in restaurant work.

• Why is my restaurant pooling tips across non-tipped staff?
  Whether tips can be shared with cooks, dishwashers, or other staff who don't customarily receive tips depends mainly on one fact: whether your employer takes a tip credit. If the employer pays you a reduced cash wage and counts your tips toward minimum wage, federal rules limit the pool to employees who customarily and regularly receive tips. If the employer pays all workers at least the full federal minimum wage in direct cash wages and takes no tip credit, federal rules may permit a broader pool. Two things are not permitted in either case: the employer keeping tips, and managers or supervisors taking a share of the pool.
• Why does my restaurant take a cut of my tips?
  Under federal rules, employers may not keep any portion of employees' tips for any purpose — and this is true regardless of whether the employer takes a tip credit or pays the full minimum wage directly. That covers the owner, managers, and supervisors. But not every deduction is the same thing: passing through the actual cost of a credit card processing fee is permitted under federal rules within limits, and money from a compulsory service charge is not a tip at all. Working out which of these is happening is the whole task.
• Why does my restaurant pay me less than minimum wage as a server?
  A low hourly rate for a tipped server is usually the tip credit, which federal law permits — but only under conditions, and only up to a point. The employer must pay a direct cash wage of at least $2.13 an hour, must be able to show in each workweek that tips actually received brought you up to at least the full federal minimum wage of $7.25, and must make up the difference in any week they don't. The credit also depends on notice, on how any tip pool is composed, and on no improper deductions. State or local law may set a higher minimum wage, require a higher cash wage, or prohibit the tip credit entirely — and the most protective standard applies.
• Why Does My Restaurant Make Me Work Off the Clock?
  Off-the-clock work means required or permitted job tasks are happening outside the time recorded for pay. In restaurants it can appear as pre-shift setup before clock-in, closing work after clock-out, side work during an unpaid period, or a manager telling someone to clock out and then finish. Federal wage-and-hour rules focus on whether the employer requires or permits the work, not merely what the time clock says. The key diagnostic question is whether the unpaid activity is actually part of the job and whether management knows or has reason to know it is happening.
• Why Does My Restaurant Deduct for Breaks I Never Took?
  A meal-break deduction can be legitimate when you actually receive a bona fide unpaid meal period and are completely relieved from duty. The problem is different when a system automatically subtracts 30 minutes even though you kept working, were interrupted, or never got the break. Federal guidance says bona fide meal periods are not work time only when the employee is completely relieved from duty; the Department of Labor has also warned that automatic-deduction systems can create FLSA problems when they subtract breaks that were not actually taken. The useful question is not simply whether a deduction exists, but whether the deducted period was truly duty-free.