Waiter and Waitress Tip Credits in New York City

In New York, individuals working as waiters, bartenders, porters, doormen, delivery boys, and other similar workers can potentially earn significant amounts by the way of tips. There are specific laws governing tips and wages which a waiter or waitress might earn as an employee. The employee’s legal rights are protected under both federal and state laws.

The law which is more favorable to an employee is usually taken into account. Rules regarding tip amounts, whether you need to contribute to a ‘tip pool’, and the amount of wages which your employer is required to pay are covered under state laws.

If you believe that your employer is not treating you fairly where tip credits or fair wages are concerned, you should reach out to Emre Polat, an accomplished New York employment law attorney. If you have a valid case, then the law allows you to recover double the wages owed to you as well as attorney fees.

You should be aware of your legal rights under federal and New York state laws if you are a waiter, waitress, or another worker earning tips as part of your work income.

An Overview of Laws Related to Tips

Tips are meant for the employee and the basic rule regarding tips suggests that the employer has no right over it. Under New York State law, an employer can include tips to be a part of the minimum wage requirement. Whatever tip credits you earn, or a part of it, can be taken into account by your employer while calculating your wages. Your employer is legally not permitted to take your tips, but by counting it as a part of your wages, he gets to pay you less anyway.

In some cases, you can be expected to share your tips with a ‘tip pool’. If you are part of a valid tip pool then some part of your tip earnings will go into the pool to be shared by all the employees.

What are Tip Credits?

The minimum wage requirement is imposed by both federal and state laws and the higher amount under the law needs to be paid by the employer. But in case of tip earning employees, the employer pays less than minimum wage as the employee is already making up the difference by earning tips. This difference between the minimum wage amount and the actual amount paid is referred to as ‘tip credits’. In case you do not earn enough tips in a week, then the employer has to pay it out of his own pocket in order to cover your minimum wage requirements.

Summary of Wage Orders and Credits for the Hospitality Industry provides updated information about the minimum hourly wage which an employer needs to pay in the hospitality sector. In New York, tip credits can be accounted for as part of wages by the employer.

However, the specific amount depends on industry and size of establishment. Tip credits for a waiter can be very different from tip credits for a housekeeper. In any case, the employee must be informed in writing about tip credits.

Furthermore, if an employee works more than 20% of his or her shift or spends 2 hours working in a non-tipped role, then the employer cannot claim tip credits. In these types of cases, the employer has to pay the minimum wage in full and cannot claim tip credits to pay a lesser rate.

What is Tip Pooling?

There are many states including New York in which tip pooling or tipping out is allowed. Tip pools are where employees chip in a portion of their tips to be divided equally among all. In such cases, the employer can count only those tips which the employee gets to take home against his minimum wage obligation.

The employer cannot be held liable if an employee unfairly withheld his or her share of tips from the pool. Also, the employer cannot expect the employee to contribute more to the tip pool than what is customary or generally accepted.

Tip pooling or tip sharing is allowed under New York law. However, only those employees who render service or assist in performing personal services to customers as part of their job description can participate in a tip pool.

Employees who have authority or a managerial role cannot be part of the tip pool. Also, an employer cannot be part of the tip-sharing arrangement. Any employee who is in a limited supervisory role can be a part of the tip pool if his job description entails him to provide personal services to patrons as a regular part of their duties.

In New York, an employer is allowed to deduct the employee’s share of credit card processing fee from their tips.

Seek advice from a restaurant tip credit and overtime attorney

If you are a captain, bus boy, waiter, waitress, bartender or any other worker from the hospitality sector with concerns about your tip payments, speak to Emre Polat to ensure that your employer is not cheating you out your rightful wages. Call (212) 480-4500 to set up an initial consultation today.