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Tip Pools: Are You Floating in Cash or Financially Drowning?

Most employees hope to make a good impression and work hard while performing their necessary job duties. Often, praise and compensation allow workers to feel a sense of accomplishment that makes it easier to return to work day after day. As a person who receives tips as part of your employment compensation, you may feel a particular sense of pride when a patron leaves a considerable tip for your services.

Unfortunately, you may also feel a bit let down when you have to place your tips into a tip pool intended for distribution among allĀ tipped employees at the restaurant, bar, or another facility where you work. Though this type of system may help you on shifts when your own tips fall a little short, you may wonder about the legality of such a system.

Is pooling tips legal?

Though pooling tips and splitting them evenly may seem unfair if your hard work results in the same tips as a less dutiful employee, wage and hour law does allow this type of system. However, stipulations do apply when it comes to fairly and legally distributing tips.

For instance, managers should only divide pooled tips to workers who regularly receive tips and receive the minimum wage for tipped employees. Tipped workers typically receive a lower set minimum wage than regularly compensated workers, and therefore, if tips also go to non-tipped workers, the tipped employees’ wages could fall below the minimum allowed. In Arizona, the minimum wage is $10 an hour, including tips.

Additionally, employers should not keep tips for themselves or for purposes other than compensating the tipped workers. Retaining tips for other purposes is illegal, and you may have reason to file a wage-and-hour claim against your employer if you believe your employer has committed a wage violation.

How should you address issues?

Because tip pooling and equal distribution can become complicated, you may wonder how to address problems with the system. If other workers cause issues by holding back tips, skimming from the tip jar or engaging in other such behaviors, you can inform your employer as soon as possible. Your manager may be able to address the concern and correct the issue.

If your employer has violated regulations relating to tip pools or minimum wage requirements for tipped workers, you may also speak with that individual first. However, if your complaints go unheeded, you should consider speaking with an employment law attorney. An Arizona employment lawyer can assess your case and explain your options for receiving proper compensation and any back pay you are owed.