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  • tip pooling Texas

    Ok, I thought I did understand how mandatory tip pools work but I actually need clarification on something. Is eligibility determined by whether or not you have regular contact with customers or if you are considered to work in an area that "normally receives tips"? I need to know because historically my kind of job does not receive tips but at the restaurant I work at our set up requires us to serve customers food. Is that the determining factor? Does it matter how much of my shift is spent doing this?

  • #2
    If I remember correctly, you are a chef? Do you work in one of those Benihana-type restaurants?
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      Yeah, very similar.

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      • #4
        OK, then I'm going to give you a soft answer and say that chefs in this environment ARE "reasonably and customarily tipped", even though chefs in a back kitchen are not.

        When you aren't out front doing that type of work, what are you doing?
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          ...and how often are you out front, interacting and serving the guests?
          HOOK 'EM HORNS!!!
          How do you catch a very rare rabbit?
          (unique up on him)
          How do catch an ordinary rabbit?
          (same way)

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          • #6
            Texas Law...

            I hope I'm not too late to contribute.

            Texas law (Texas Minimum Wage Act, Section 62 of Texas Labor Code, Section 62.052) defines tipped employee as one who "...customarily and regularly receives more than $20.00 per month in tips."

            That's a pretty low threshhold, and causes an expansion of the application of the FLSA, I believe. It also allows a lot of employers access to the tip credit.

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            • #7
              Tip Credit - Texas

              I believe it is correct that if the employer pays all employees, including tipped employees, the current minimum wage [or more] without claiming the tip credit, then the pooled tip restrictions do not apply. Can anyone confirm this?

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              • #8
                Not my area of expertise, but if we are talking federal law only (FLSA), I would say no. The actual FLSA law itself has a section that very specifically says that tips belong to the employee except as excluded by a valid tip pool as defined by FLSA. If it was my tips being taken, I could make a very good argument that this was illegal based on a very straight reading of the FLSA law.

                I mentioned that this is not my area of expertise. What I did not say is that FLSA has been around since the 1930s, meaning 70+ years of DOL administrative and court judicial decisions on this particular question. This has to be very well decided law - I just do not know (or much care) what the decision was.

                And as mention, we might be talking TX law, not federal law. If so, I have no knowledge of TX rules at all.
                "Reality is that which, when you stop believing in it, doesn't go away".
                Philip K. **** (1928-1982)

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                • #9
                  To my knowledge, Texas does not have any laws that would supercede federal on this issue.
                  I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                  • #10
                    Tip Credit - Texas

                    I believe I am correct.
                    Title 20 USCA Section 203(m) permits an employer to pay a tipped employee [defined in 29 USCA Section 203(t)] the "sub-minimum" wage of $2.13/hr plus "an additional amount on account of the tips received by such employee which amount is equal to the difference between the wage specified in paragraph (1) and the wage in effect under section 6(a)(1)."
                    If the employer elects to pay a tipped employee the standard minimum wage in effect under 29 USCS 206(a)(1) ... e.g. $6.55/hr, or more [as of May 2009], without regard to tips, then the tip credit rules are irrelevant.
                    But I would like to hear the views of a specialist.
                    Thanks.

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                    • #11
                      The tip credit IS the difference between the minimum wage and the sub-minimum wage allowed to be paid to directly tipped employees. I'm not sure what else to tell you.
                      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                      • #12
                        The OP's original comment was...

                        I believe it is correct that if the employer pays all employees, including tipped employees, the current minimum wage [or more] without claiming the tip credit, then the pooled tip restrictions do not apply.
                        However the exact wording of the FLSA law (section 3(m)(2) says:

                        ... all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.
                        If we instead look at the federal DOL tip fact sheet, we see the following:
                        http://www.dol.gov/esa/whd/regs/compliance/whdfs15.htm

                        3) Allow the tipped employee to retain all tips, whether or not the employer elects to take a tip credit for tips received, except to the extent the employee participates in a valid tip pooling arrangement.
                        So I guess the question is just what the OP thinks the not taking the tip credit accomplishes. I am seeing nothing that indicates an other then "valid" tip pooling arrangement is ever legal.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

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                        • #13
                          Originally posted by DAW View Post
                          So I guess the question is just what the OP thinks the not taking the tip credit accomplishes. I am seeing nothing that indicates an other then "valid" tip pooling arrangement is ever legal.
                          If that is the question, I agree. Actually, I also agree if that is NOT the question.
                          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                          • #14
                            Tipped Employees - Texas

                            Thanks ... that reg cite is helpful.

                            The discussion in the reg follows from this point of beginning...

                            "Requirements

                            If an employer elects to use the tip credit provision the employer must: ...."

                            ..which supports my view that if the employee is paying all employees minimum wages without "elect[ing] to use the tip credit....." the federal regs relating to tip poollng do not apply.

                            The context I' m dealing with is a "grab n go" deli where patrons may elect to tip at the counter. All employees ... both behind the counter and in the kitchen are paid more than $6.55/hr ... and the issue is whether tips collected may be shared with staff in the kitchen who prepare the goods sold in the front of the house from the grab n go cases. My opinion is the FLSA does not prohibit this.

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                            • #15
                              I believe you are incorrect laborlaw77.

                              You stated:

                              If an employer elects to use the tip credit provision the employer must: ...."

                              ..which supports my view that if the employee is paying all employees minimum wages without "elect[ing] to use the tip credit....." the federal regs relating to tip poollng do not apply.

                              If you read on, the fact sheet states, Allow the tipped employee to retain all tips, whether or not the employer elects to take a tip credit for tips received, except to the extent the employee participates in a valid tip pooling arrangement.

                              To further contradict you logic, this same fact sheet goes on to explain that Where an employer does not strictly observe the tip credit provisions of the Act, no tip credit may be claimed and the employees are entitled to receive the full cash minimum wage, in addition to retaining tips they may\should have received.

                              What is evident, is that even if an employer does not utilize the tip credit, he must allow the employee to retain the tips he may/should have received.

                              To further condradict you reasoning, please realize that if there where no federal laws requiring employers to allow the employee to retain his tips, the employer would not need to take a tip credit, he could simply confiscate all tips and use them to pay his employee's minimum wage. Do you understand what I am saying. Do you all realize what I am saying?

                              If federal laws do not protect an employee's tips, then employers would not need a tip credit. Instead of reducing the employee's hourly wages by $4.42 an hour and paying the employee $2,12 hour, the employer could legally use all the tips to pay his employee's minimum wage, thereby providing the employer with a $6.55 an hour tip credit.

                              You see, minimum wage is currently $6.55 an hour. The tip credit allows employers to utilize a limitted amount of an employee's tips to pay the employers minimum wage requirements. In other words, an employee who receives $10 an hour in tips can have up to $4.42 an hour in tips taken from him so that his employer may use the money to pay a portion of the required $6.55 employers must pay the employee. However, if the employee only receives $3.00 an hour in tips, an employer could not pay the employee $2.13 an hour due to the fact that the tips he is receiving do not bring his wages up to the required $6.55. In this example, the employer would have to pay the employee $3.55 an hour so that when his tips were added to his hourly wages his hour wages reach the $6.55 an hour minimum wage required by federal law.

                              The tip credit allows employers an exemption from federal laws which state that all tips received are to be retained by the employee.

                              To further contradict another statement you made, federal regulation do not and would not regulate tip pools. What federal regulations regulate is the protection of workers and the payment of wages earned. Tip pooling is the appropriation of the customer's tip. Federal regulations would not and could not regulate the appropriation of the customer's private property, his tip. Our constitution does not support the opinion that federal laws should or would govern our public's private property.

                              Federal law states that all tips received by employee are to be retained by the employee. However, the law further states, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.

                              Please note that the law does not suggest that tip pools are to be regulated by federal regulations, it simply states that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.

                              It does not state that, this section shall be construed to insure that tips are pooled.

                              It does not state that, this section shall be construed to insure that employers may pool tips among all those employees who customarily and regularly receive tips.

                              It does not state that, this section is authorizing the Department of Labor to appropriate the customer's tip for him.

                              What it is actually clarifying is that,
                              when an employee receives a tip from a customer, the money he receive belongs to the employee and as such the employee may use it however he chooses. You see the word "retain" as used in subsection (m) of title 29, section 203 could easily be misconstrued as restricting an employee from using his tips however he chooses. For instance if a law were to state that all receipts must be retained, the word "retain" would be interpretted as meaning that one must keep his receipts in his possession and not give them away.

                              What the law is clarfying is that, as the employee's private property, the emplyee may give part of his tips to other employees. Please see CFR 531.54 which clearly supports the fact that while federal laws state that an employee must "retain" all tips an employee must be allowed to give part of his tips to other workers such as busboys.

                              What the law is clarifying is that, as the employee's private property, which I might add, is supported by fact sheet .015, which clearly states that tips are the sole property of the tipped employee, the employee may enter into a mutual agreement with other employees whereby the tips are redistributed to the employees upon some basis to which they have mutually agreed among themselves. Please again see, CFR 531.54 which clearly supports the fact that while federal laws state that an employee must "retain" all tips, an employee must be allowed to enter into a mutual agreement with other employees whereby the tips are redistributed to the employees upon some basis to which they have mutually agreed among themselves.

                              You see, in both cases the employee is not retaining his tips when one misconstrues the meaning of federal laws which state that all tips received are to be "retained" by the employee. You see, in both cases the employee is not retaining his tips when one misconstrues the meaning of the word "retain" as that which must be kept in one's possession.

                              Federal regulations further support the opinion that the word "retain" is to be interpretted as keeping for one's use, rather than keeping in one's possession, by stating that "Only tips actually received by an employee as money belonging to him which he may use as he chooses free of any control by the employer, may be counted in determining whether he is a "tipped employee" within the meaning of the Act and in applying the provisions of section 3(m) which govern wage credits for tips."

                              However, what such insight also suggests is that employees who are forced to pool tips would not and could not be counted as employees who are receiving tips customarily and reguarly and as such the arrangment would not be the "pooling of tips among employees who customarily and regularly receive tips" which federal laws suggest may contravene the requirement that an employee is to retain all tips.

                              Let me explain.
                              For instance, an employer mandates that waiters share their tips with busboys. One cannot say that the waiters and busboys are receiving tips as money belonging to them which they may use as they choose free of any control of the employer because at any time the employer may add in bartenders to the tip pool. At any time the employer may add in hostesses to the tip pool. If the employer were to decide that he is going to include others in the tip pool such as barteners, then the waiter and the busboy would not be free to use their tips as they choose and would have to give part of their tips over to their employer so that he could share them with the bartenders. Likewise, the waiter, the busboys and the bartender could not be considered employees who are receiving tips as money belonging to them which they may use as they choose free of any control of the employer because at any time the employer could add in hostess to the tip pool thereby requiring the waiters, busboys and bartenders to give up part of their tips so the employer can share the tips with the hostess.

                              The way the law is currently being interpretted, not only can employers add in different types of workers to the tip pool, they can arbitrarily decide what percentage each employee should receive from the tip pool. At any time an employer can change the tip pool so that the bartenders get more or less. At any time the employer can change the tip pool so the busboys and hostess receive more or less. Clearly when employers mandate tip pooling, those participating in the tip pool are at the mercy of their employer when it comes to what percentage they will receive from the pool. Thus, it is proven that the employees are not receiving tips as money belonging to them which they may use as they choose free of any control of the employer. The employees are receiving income that is deprent solely on the control of their employer.

                              It is my opinion that tips received from an employer mandated tip pool cannot be counted in determining that the employee included in a tip pool are tipped employees or employees who customarily and regularly receive tips and as such a tip pool comprised of employees receiving income from an employer mandated tip pool could not be construed as "the pooling of tips among employees who customarily and regularly receive tips" which has been allowed to contravene the requirement that an employer must allow the tipped employee to retain all tips.
                              Last edited by G money; 05-27-2009, 12:54 PM. Reason: spelling

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