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Restaurant keeping ALL tips, paying minimum wage Texas

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  • Restaurant keeping ALL tips, paying minimum wage Texas

    My girlfriend just got a job at a small restaurant in town. Customers order at the counter and food is delivered to the table. Tips are taken on credit card transactions and in a tip jar. Two people work the counter, make espresso, and deliver food, two people cook in the back kitchen. The family who owns it generally work the kitchen, sometimes with another prep cook.

    The restaurant pays minimum wage and the owners keep all tips. They say that they don't pay themselves salary so they need the tips, of course they make all of the profit from the business so paying themselves salary or not doesn't affect their income.

    Is this legal? Isn't a customer facing employee who gets a tip entitled to that tip?

  • #2
    Providing the federal minimum wage is being paid, I cannot recall any laws prohibiting this. On the other hand if the employer is utilizing the tip credit this would then be prohibited.

    Others are going to be able to expand on this I am certain of that. Good luck!
    Not everything in America is actionable in a court of law. Please remember that attorneys are in business for profit, and they get paid regardless of whether or not you win or lose.

    I offer my knowledge and experience at no charge, I admit that I am NOT infallible, I am wrong sometimes, hopefully another responder will correct me if that is the case with the answer above, regardless, it is your responsibility to verify any and all information provided.


    • #3


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

      ... 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.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)


      • #4
        I understand if the employer pays $2.13/hr the workers must keep their tips, but if they pay minimum wage?

        Is there a restriction preventing (restaurant) from paying full minimum wage and keeping all tips?


        Retention of Tips: The law forbids any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. A tip is the sole property of the tipped employee. 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.

        Does this only apply for people making $2.13? Or all employees that receive tips?
        Last edited by Betty3; 04-08-2010, 09:26 AM. Reason: remove name of employer


        • #5
          To my knowledge, ALL tips. Please remove the name of the company from your earlier post; it's against the rules of the site and we don't want anybody to get into trouble for your post.

          Having said that, however, I know the Wage and Hour Compliance officer for the parent corporation of this company personally and she is VERY strict about such matters. Give the federal DOL a call and ask them.
          Last edited by Pattymd; 04-08-2010, 08:18 AM.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


          • #6
            Okay, Gmoney, that's it.

            When you start posting your rants to year old threads, you're done. You've just earned yourself a month off the boards.
            The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


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