Many people across the United States are tipped employees or employees who are paid less than the required minimum wage, but are then compensated with tips in order to make up the difference. In addition to state laws protecting and defining, “tipped employees,” the Fair Labor Standards Act (“FLSA”) contains specific provisions that how tipped employees are to be compensated. One such way for tipped employees to be compensated is through a tip-pool whereby all of the tipped employees in the establishment share in the tips earned on any workday. Most importantly, FLSA defines who can be considered a tipped employee and who cannot be, although, the statute alone has been unable to quell the debate of whether a manager who also performs tipped employee duties can share in a tip pool.
Recently, the District Court of Maryland in the Fourth Circuit, answered this question. In Gionfriddo v. Jason Zink, LLC, Defendant Jason Zink was the owner of two restaurants, the Don’t Know Tavern and the No Idea Tavern. Zink was sued by several of his employees because Zink participated in the tip pool system at both restaurants. Zink argued that his participation in the tip pool was legal because, despite being the owner of the restaurants, he was also the primary bartender for each one. Zink pointed out to the Court that bartenders are commonly considered tipped employees under the FLSA, and thus, it was appropriate for him to share in the tip pool. The Court disagreed.
Specifically, the Court determined that because Zink was considered an “employer under the FLSA, he could not possibly also be considered a tipped employee who could share in a tip pool. Indeed, it did matter whether Zink was the sole, primary or only part time bartender of the restaurant because as stated by the Court, “this Court need not evaluate the extent of Mr. Zink’s bartending activities because it would be [contrary] to the purpose behind the FLSA to simultaneously allow him to take tips from a collective tip pool that was set up to allow him to pay his employees at a rate substantially below the minimum wage.” As such, Zink’s participation in the tip pool was illegal under the FLSA.
The Gionfriddo decision is not alone in holding that an owner or other management personnel of a business cannot partake in a tip pool. As pointed out by the Court, “every court that has considered the issue has unequivocally held that the FLSA expressly prohibits employers from participating in employee tip pools.”
Are you a tipped employee? Do you participate in a tip pool? Do you know who else participates in your tip pool? Does anyone considered to be management participate in your tip pool? These are just some of the questions, the answers of which may determine whether you have a valid wage and hour claim against your employer for violation of the FLSA. If you think your employer may be violating your rights, you should contact a wage and hour attorney today to have your questions answered.
If you even think that your employment rights have been violated or that you might need an employment lawyer, then call the right attorney to schedule a free and confidential consultation at 866-797-6040. The Spitz Law Firm is dedicated to protecting employees’ rights and solving employment disputes.
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