Tips are the property of the employee, whether or not that employee has taken a tip credit under the Fair Labor Standards Act.
So states Labor Department Fact Sheet #15A, released by the Wage and Hour Division in February.
The fact sheet reflects tip credit regulations DOL updated in May 2011.
Under the regulation, an employer who satisfies the requirement to take a tip credit may use an employee’s tips only:
- As a partial credit against its minimum wage obligation to the tipped employee and/or
- If the tips go into a tip pool.
Even if the employer does not take a tip credit, tips remain the property of the employee who received them and the employee cannot be required to turn over the tips to the employer, according to the fact sheet. Similarly, the employer may not take the employee’s tips to further an invalid tip pool, such as one that includes employees who do not customarily and regularly receive tips, like cooks, janitors or dishwashers.