The Legal Dish

Dear Can’t Receive Tips,

I really want to get angry for you. Let’s be honest, most of the service employees working in restaurants earn more money from their tips rather than the hourly wage. It feels like something is wrong, but my feelings are worth absolutely nothing.

The dirty truth is that when you receive tips, the legal rights become complicated.

Most rules about tips depend on state laws, but federal, state and local laws – whichever is more generous to the employee – governs.

The basic rule under the federal Fair Labor Standards Act (29 CFR 531.50) is that an employer cannot keep an employees’ tips. Tips belong to the employee. Not the employer. Not the manager. Not the supervisor.

However, there are always exceptions!

Some state laws, including New Mexico, allow an employer to take a tip credit. A tip credit allows the employer to count all or part of an employees’ tips towards its minimum wage obligations. They are not “taking” the tips in violation of the FLSA.

If the employee doesn’t make enough in tips to make at least minimum wage for each hour worked that week, the employer must make up the difference.

While your situation does not sound like a tip credit situation because they are paying you above minimum wage,

I would specifically ask management whether they are using a tip credit. Maybe they have a backwards explanation for what is happening. Maybe not.

Either way, they should have a very good reason why you cannot keep your tips.

And feel free to show them federal law because an employer cannot require an employee to give their tips to the employer, even where a tipped employee receives at least the minimum wage per hour in wages directly from the employer and the employer takes no tip credit.

Anyone can check with their state Labor Commissioner or Labor Relations Division for any specific state law questions or to make any complaints related to tips or other wage issues. .