How to Recover Tips Owed by Your Employer
Every year, restaurants are forced to pay millions of dollars to their servers, bartenders, bussers, and other tipped employees because they engaged in illegal tip pooling. The restaurants that have been caught include large national chains and restaurants owned by celebrity chefs.
If you have not been paid your fair share of customer tips because of an illegal tip pool, here is what you need to know.
What is a tip pool?
A “tip pool” is an arrangement whereby tipped employees pool their tips. The tips are then distributed to eligible tipped employees who provided service to customers. Each tipped employee receives a percentage of the amount of money in the tip pool based on their position at the restaurant.
When is tip pooling allowed?
Employees may voluntarily agree to pool their tips, or the restaurant may require them to participate in the tip pool. The tip pool must be limited to employees who customarily and regularly receive tips from customers. All the tips placed in the tip pool must be distributed to the tipped employees. The employer may not withhold any of the tips in the tip pool. In addition, if the employer requires participation in the tip pool, then it must give employees notice of how the tip pool works.
Who may be included in a legal tip pool?
A tip pool may include workers who customarily and regularly receive tips as part of their compensation. This usually includes front of the house employees who provide services directly to customers. In the restaurant industry, the participants in a tip pool may include:
- Waiters and Waitresses
- Food Runners
Who may not be included in a tip pool?
Employees who do not customarily and regularly receive tips may not be included in a tip pool. For example, the following types of employees may not be included in a valid tip pool:
- Managers and Supervisors
- Chefs and Cooks
- Silverware Rollers
Hosts and hostesses fall into a grey area. They are usually not eligible to participate in a tip pool. But they may be allowed to share in tips if they provide direct services to customers by taking drink orders, serving food and drinks, and/or clearing tables.
How can I get paid what I am owed?
If you have been denied your fair share of tips, then you may be able to join a class action lawsuit against your employer. This is a very effective way to recover what you are owed because there is real strength in numbers.
In recent years, restaurant chains have paid millions of dollars to settle class action lawsuits involving tip pools. Here are just a few examples:
- TGI Friday’s paid $19.1 million to settle a class action lawsuit alleging that it required waiters to share their tips with silverware rollers and expeditors;
- Celebrity chef Mario Batali paid $5.25 million to settle a class action lawsuit alleging that his restaurant deducted a share of alcohol sales from the tip pool;
- Surly Brewing Company paid $2.5 million to settle a class action lawsuit alleging that it allowed non-tipped employees to participate in a tip pool;
- A Red Robin franchisee paid $1.3 million to settle a class action alleging that it required front of the house employees to share their tips with kitchen workers;
- World famous French restaurant Le Cirque paid $1.1 million to settle a class action alleging that it required workers to participate in an illegal tip pool;
- Landry's Seafood Restaurants paid $1 million to settle a class action lawsuit alleging that it required servers to share tips with hosts and hostesses who did not provide direct guest service such as serving food and beverages or clearing customers’ tables.
Will I have to pay any legal fees?
No. If you have a strong case, we will represent you on a contingency fee basis. This means that we will not be paid any legal fees unless you win. And if you do win, we will ask the court to order your employer to pay our attorneys’ fees and expenses.
We begin with a free and confidential conversation. Call us at (212) 601-2728 or complete the contact form on this page to learn about your rights.