06/05/2023
DC and Federal Tip Pool Laws
TIP POOL VIOLATIONS
Federal and state laws both regulate the wage and hour laws in this country. When the state laws and the federal laws regulate the same act or acts, employers must comply with the more restrictive laws in order to satisfy both sets of laws.
As an example, if the minimum wage under the federal laws is $12 per hour, but the state requires employers to pay $15 per hour, the employer must pay the greater amount to comply with both sets of laws.
WHEN CAN TIP POOLS INCLUDE KITCHEN STAFF AND OTHER EMPLOYEES WHO TYPICALLY DO NOT RECIEVE TIPS?
FEDERAL LAW
Under federal law, tip pools involving kitchen employees and others who do not customarily receive tips is ONLY permitted if the employer pays the tipped employees minimum wage plus tips.
If the employer pays the servers and bussers a “tip credit amount”, like in Virginia, $4/hour, tip pools can ONLY include people who customarily receive tips, which usually includes ONLY front of the house employees and nonmanagers who traditionally and customarily receive tips from the patrons.
WHAT THE EMPLOYEE IS OWED UNDER FEDERAL LAW FOR VIOLATIONS
The damaged employee can receive either 2X’s the amount of the wrongfully taken tips or 3X’s that amount if the violation is deemed willful. Employees also receive their costs, attorneys’ fees.
DC LAW
Under DC law, it is unlawful to have a tip pool with kitchen staff, managers or other employees who do not traditionally receive tips even if the employer pays minimum wage to the employees.
WHAT THE EMPLOYEE IS OWED UNDER D.C. LAW FOR VIOLATIONS
Employers who violate this law can be liable for up to 4X’s the amount of unpaid wages plus penalties, attorneys’ fees, and costs.
