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4 Ways Your Employer Might Be Withholding Your Hard-Earned Tips

By Leeds Brown Law | November 24, 2018

Boss Tips New York Lawyer

Is Your Employer Withholding Your Hard-Earned Tips?

Tipped employees are entitled to certain protections under New York Labor Laws and New York Department of Labor Regulations against stolen tips. Employers who regularly do not distribute tips, retain tips, or fail to provide proper notice of tip polices may be in violation of these laws. Often, unscrupulous employers take advantage of the tipping structure in hotels, restaurants, catering halls and other service industries by denying employees what they rightfully earned. Most tip violations occur in four areas: (1) tip credits, (2) retention of shared or pooled tips, (3) mandatory service charges, and (4) tips received by way of credit card.

Being Paid Less Than The Tip Credit Allows?

One of the largest issues tipped employees in New York face is the tip credit. If done properly, an employer may take a credit against the minimum wage if the employee receives enough tips and the employee has been explicitly notified of the tip credit. This allows an employer to pay a tipped employee less than the minimum wage, but often the employee is paid even less than the tip credit allows or notice is not properly provided. These actions may be considered violations of 12 NYCRR 146-2.2 and Labor Law 195.

Is Your Employer Taking A Portion Of A Tip Pool?

Under New York Law, employees have a right to their share of a mandatory service or administrative fee that is added on to a customer’s bill. In New York, unless a mandatory fee is clearly and unequivocally disclaimed as not being a gratuity and that no portion is distributed to the staff, the service employees are entitled to said fee as a gratuity under Labor Law § 196-d. If this mandatory service or administrative fee is not disclaimed to customers as being a gratuity, and the employer keeps this fee for itself or management, this may be considered a violation of Labor Law § 196-d.

Is Your Employer Withholding Mandatory Service Or Administrative Fees That Are Actually Gratuities?

Under New York Law, employees have a right to their share of a mandatory service or administrative fee that is added on to a customer’s bill. In New York, unless a mandatory fee is clearly and unequivocally disclaimed as not being a gratuity and that no portion is distributed to the staff, the service employees are entitled to said fee as a gratuity under Labor Law § 196-d. If this mandatory service or administrative fee is not disclaimed to customers as being a gratuity, and the employer keeps this fee for itself or management, this may be considered a violation of Labor Law § 196-d.

Is Your Employer Deducting Too Much From Your Tips For Credit Card Service Fees And Keeping That Money For Itself?

An employee is also protected from overcharges against their tips for credit card service fees. An employer may not deduct the price of a credit card company’s service fee off an employee’s tips beyond the prorated portion of the tip. Simply put, an employer may only reduce the tips of an employee by the amount the tip increased the service charge.

Tip theft occurs all too often in various hospitality industries. Leeds Brown Law, P.C., has filed class actions against numerous establishments that have engaged in illegal pay practices, successfully representing victims of tip theft to recover their hard-earned pay. If you’re a directly or non-directly tipped worker, it’s important that you hold on to pay stubs and keep a record of the tips you’ve earned. You may find that your employer is, in fact, withholding your hard-earned tips.

If you believe your employer is withholding your tips, you may want to take legal action right away. Don’t let your employer violate your rights. It is unlawful for your employer to retaliate/take negative employment actions against you for expressing concerns about unpaid wages, overtime or tips and/or filing a claim against it. You may be owed significant compensation. The New York Employment Attorneys at Leeds Brown Law, P.C., have offices in both Nassau County, Long Island and New York City. Protect your hard-earned tips and your employee rights.

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