Can My Boss Take My Tips? Minimum Wage for Tipped Employees in Ohio

Oct 22, 2020

While federal and Ohio laws for tipped employees is complicated, the answer to whether or not your boss can keep your tips is fairly straight forward: No, your boss may not keep your tips.

Ohio labor laws and the Fair Labor Standards Act (“FLSA”) govern how employers pay its tipped employees. A “tipped employee” is one who customarily and regularly receives more than $30.00 per month in tips. Under both federal and state wage and hour laws, tips have long been considered the property of the tipped employee, not the employer. This rule means that the employer may not take a tipped employee’s tips directly, or, share any of the tipped employee’s tips by participating in a “tip pool.”

What is a tip pool and when is a tip pool unlawful?

While employees must retain the tips that they earn, employers may require employees to share or split tips with other tipped employees, such as other bartenders, wait staff, bus staff or servers. When employees share their tips with other tipped employees, the arrangement is known as a “tip pool.” However, employers may not require tipped employees to share tips with employees who do not regularly and customarily receive tips, such as dishwashers, cooks, chefs, and others. This also includes individuals who are owners, managers, and supervisors. Therefore, it is unlawful if your boss is participating in the tip pool and taking or sharing your tips.

What is a tip-credit and what are common employer tip credit violations?

What is Minimum Wage for Tipped Employees in Ohio

The FLSA also regulates employers’ obligations for paying Ohio minimum wage when its employees receive tips. When it comes to paying tipped employees, the FLSA permits employers to take a “tip credit”, which discounts the amount the employer has to pay as a direct wage to its tipped employees. The FLSA, however, provides that employers may only take up to $5.12 an hour as a tip credit, which means employers cannot pay less than $2.13 per hour as a direct wage to employees.

Regardless of how much the employer pays as a direct wage, tipped employees still must earn at least $7.25 per hour (the federal Ohio minimum wage tipped employees) when combining the tips that the employee actually received and the direct wage that the employee is paid. If the employee does not receive minimum wage when combining the two amounts, the employer must pay the additional difference to ensure that the employee receives the full minimum wage.

Similarly, even though employees can take a tip credit, employees may not be paid less than $2.13 per hour as a direct wage. For example, employees cannot be required to work on tips alone, regardless of how much the tips total. If an employee is only working for tips, the employer must pay the full minimum wage to the employee.

Lastly, if deductions are made to employees (for breakage, cash register shortages, etc.) and those deductions reduce the employees’ wages below the minimum wage, those deductions are considered unlawful.

What are my remedies if my boss is keeping my tips?

You may be asking, “what do I do if my boss is stealing my tips?” Both the FLSA and Ohio laws for tipped employees protect employees from being retaliated against or otherwise terminated if they make complaints to their current employer about wage violations. Despite the protections afforded under the Ohio labor laws, we understand that making a complaint at your current workplace for wage violations may still feel uncomfortable.

For these reasons, our firm first attempts to resolve disputes amicably without the need for litigation. However, after those attempts, if it is clear that a wage violation has occurred and the employer is unwilling to resolve it, litigation may likely be the best avenue to recover unpaid wages.

Under Ohio labor laws and the FLSA, a private lawsuit may be filed against an employer for wage violations. Importantly, all employees who have suffered the same wage violations may also join together and file one lawsuit known as a collective action. When an employee successfully proves that the employer violated the FLSA, the employer may be required to pay back wages (the wages that should have been paid), an additional amount equal to the back wages (known as “liquidated damages”), plus the attorney fees and court costs.

Contact Brian G. Miller Co., L.P.A. to discuss your questions about Ohio laws for tipped employees

If your boss is keeping your tips, or if you have general questions about whether your employer has violated federal and Ohio labor laws for tipped employees, please call (614) 221-4035 or click here to schedule a free consultation with a trusted and respected wage and hour attorney at Brian G. Miller Co., L.P.A.