Tips on Tips

There are many occupations where employees are traditionally compensated for their work with tips from customers. Workers who receive more than $30 per month in tips are legally defined by the Fair Labor Standards Act as “tipped employees” and are immediately subject to modified wage structure rules.

The failure to ensure that you fully grasp the implications of the relevant provisions of the FLSA can lead to costly wage disputes that hamper your ability to focus on your business’s operations. These can also tarnish your reputation with prospective employees and customers so it should not be taken lightly.

The Des Moines business lawyers of LaMarca Law Group, P.C. have the skills and experience necessary to help you avoid falling into the trap of common misperceptions regarding tips and your obligation to your employees. For answers to your wage-related questions, contact us at (877) 327-2600. Taking the time to do so now can save you considerable time, money, and stress further down the road

Key Details of Tip Law

Though significant strides have been made in correcting traditionally held misconceptions, historically repeated mistakes have confused the issue to the point that even well-meaning business owners are not entirely sure what they should and should not be doing with tipped employees’ wages. Some key details of tip law include:

  • Service charges (such as restaurants imposing a set gratuity for large parties) do not qualify as tips
  • An employer is not entitled to any portion of a tip that an employee receives
  • If tipped income and the minimum wage for tipped employees do not combine to meet the federal or state minimum wage, then the employer must make up the difference
  • Wage deductions cannot be imposed on tipped employees for customer walk-outs or breakages

Contact Us

Do not get caught unknowingly in violation of the law. Contact the Des Moines business lawyers of LaMarca Law Group, P.C. today at (877) 327-2600.

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