Payment Wages For Tipped Employees
Most people in the service sector are tipped employees and receiving tips is part of their practice. If you are one of these employees, it is incredibly important knowing the laws that govern the payment of your wages. Depending on your state of residence, the laws that define and govern the payment of wages to tipped employees differ considerably. The Fair Labor Standards Act (FLSA) is a legislative piece that governs tipped employees.
These federal laws define the minimum wage for more than a hundred million American workers who work in hospitals, nursing or medical care, government agencies and preschools. Nonetheless, these laws govern employees of private organizations that transact business worth $500,000 per year, if the company has at least two employees. In addition, the Fair Labor Standards Act covers employees who do business across states. Moreover, domestic employees who earn at least $1000 from one employer per year are covered.
Every employer is required by law to pay an amount that is equal or more than the minimum wage level. However, the employer is at liberty to deduct an equivalent of the tip that an employee has received. Some states require employers to pay a higher hourly wage to tipped employees so that when the tip is deducted, they will still remain with some decent paycheck. However, before affecting this, they are required to inform the employees about this, ensure that they pay out an equivalent of a minimum wage, including the tips.
If during low periods an employee doesn’t receive a good amount in tips, the employer is required to top up the amount to make it equal to the federally acceptable minimum wage level. If you feel that your employer has violated this, it is imperative that you check your state’s Minimum Wage for Tipped Employees.
If an employee works overtime, the federal minimum hourly rate as provided by the laws should be used to calculate the amount that should be paid to the employee. The tip amount can then be subtracted from the amount of overtime pay that has been computed.
Moreover, all tips received should be paid out to employees because the law does not require it to be employer’s property. Tipped employees retain full rights to the tips that they receive while offering service. Also, pooling of tips for the purpose of sharing among all the employees is legally allowed.
However, employees who work in both tipped and non tipped positions can use tip credit while on positions that earn them tips and the rest do not qualify. The tip should be paid within the period of regular pay, even when the customer pays using a credit card.
Tipped employees can file a complaint with the FLSA if their employers have not paid their tip or minimum wages. This way, the payment of the employee’s wages will be supervised and ensured that it is paid.
If you, or someone you know, are facing legal issues in the workplace United Employees Law Group has answers, Call Today for your free and confidential case review. Please feel free to CONTACT US with any questions about this blog or your exact situation.
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