If I Work for Tips, Can My Employer Take Them? By on July 17, 2015

If you work for tips, you have a lot of protection under both the federal Fair Labor Standards Act and Montana state law. Even though tips may constitute the larger part of your earnings, you are entitled to the legal minimum wage even if your tips in any given workweek don't bring you up to that level. A big difference between federal and state law on this issue is that federal law allows the use of tips to meet the minimum wage, while state law requires payment of the minimum before tips. After reading this blog, you'll see that state law is far more generous than federal law.

The FLSA requires that employees in tipped positions be paid at least $2.13 per hour in base wage, so long as tips received make up the difference between that amount and the federal minimum wage of $7.25 per hour. If the tips don't bring the total amount of earnings for the workweek to the minimum wage, the employer must increase the base wage until the threshold is met. In Montana, however, state law sets the minimum wage at $8.05 per hour. As noted previously, this wage must be met separately from any tips received by the employee.

Other aspects of the treatment of tips under federal and state law are similar. For example, under both, it is unequivocal that tips belong to the employee, not the employer. Also, tip pools may be established into which all or part of the employees' tips are contributed to a pool that is then divided equally among them. Under federal law, employers can mandate the use of a tip pool. In Montana, however, all the tipped employees must first agree to participate in a pool. Under both laws, only the tipped employees may participate in the pool.

Another way that Montana differs is in cases where a service charge is added to a bill. For example, restaurants will sometimes assess a set gratuity to a large party that is part of the bill and is not voluntary. Under federal law, that money belongs to the employer. In Montana, the money belongs to the employees who served the party.

The substantially more generous treatment of such jobs by state law may lead some employers to try to take advantage of unsuspecting employees. At Tipp & Buley, we have over 55 years of collective experience in employment-related legal matters. If your employer is trying to take your tips or not paying you the minimum wage, please call us. We'll put our experience to work for you. Call 406-549-5186 or visit us online to set up a one-on-one consultation..

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