Tipping Infographic Part 2: Questionable Payment Practices

In our last post, we discussed the basic theories and history behind tipping, as presented in the Accounting Degree Review’s comprehensive infographic, “Tipping in the United States.” Today, we will discuss the current state of affairs for tipped employees and how they can ensure they receive fair compensation for their work, including seeking advice from reputable New York employment attorneys.

As the infographic indicates, tipped employees only need to earn $30 per month in tips to “qualify” for the subminimum wage, which is currently frozen at $2.13 per hour. However, for full-time employees, $30 in tips on top of the subminimum wage paid by the employer still amounts to much less than minimum wage.

In addition, most states offer employers a “tip credit,” which reduces the wages they must pay to tipped employees based on the tips they receive. The law also stipulates that when employees don’t make enough between tips and their hourly wages to equal minimum wage, the employer must make up the difference. However, many employers do not comply with this law, even when staff or other entities discover the discrepancy.

In the few states that don’t impose a tip credit, servers are guaranteed at least minimum wage, and tips comprise additional wages beyond what their employers pay. On average, servers in tip credit states earn significantly less than those in states that use no tip credits or partial tip credits.

Overall, servers (particularly women) are three times more susceptible to poverty than those in other professions. However, regardless of where you live, you can take several steps to ensure that your employer is engaging in fair and legal compensation practices. These methods include:

• Get educated.
Read the Fair Labor Standards Act (FLSA) regulations for employers of tipped workers, and consider whether your employer is adhering to all of them.

• Ask questions. If your paycheck seems outrageously low or you don’t understand the employer’s pay structure, don’t be afraid to talk with your supervisor. You provide the company a service, and you have a right to discuss proper compensation.

• Get help when needed. If you believe your rights are being violated, contact a qualified attorney.

If you think your employer may be violating compensation regulations, New York employment attorneys at Joseph & Kirschenbaum can help. Call us today at (212) 688-5640 for more information.