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5 important things to know if you are a tipped employee

Hundreds of thousands of people work in jobs where they don't just depend on their paycheck, they also depend on tips. This includes people who work in food service, hospitality and occupations like aestheticians and parking attendants.

If you work for tips in New York, you should know that you have rights under state and federal laws. Below, we look at some of the basic things you should know about your legal protections and what you can do if you have questions or concerns about your wages and tips.

  1. You have the right to keep your tips. Under both state and federal wage laws, employers cannot take, accept or otherwise retain tips left for an employee. 
  2. There are limits to tip credits. If your employer uses your tips as a credit against the requirements for minimum wage, the amount cannot exceed certain levels. These levels vary based on location, industry and occupation. As an example, if you work in food service in New York City for a large employer, the tip credit cannot exceed $5.00.
  3. Employers must give tipped employees certain information before utilizing a tip credit under the Fair Labor Standards Act (FLSA). That information, which can be read in full here, includes tip credit levels and the cash wage an employee should receive.
  4. Cash wages and tip credits must add up to satisfy the minimum wage requirement. Again, this number requirement varies by occupation, location and employer, so be sure you understand what the minimum wage requirement is for your specific position.
  5. In New York, some employers may require tip pooling. This means that tipped employees combine their tips and distribute them among tipped employees. If employees set up a tip pooling arrangement, they decide how to distribute the tips; if the employer sets it up, the employer may make the decision.

These are some basic facts that every tipped employee should know to ensure they are receiving fair pay. If you are concerned that you are not receiving the compensation or tips to which you are entitled, then it may be wise to consider taking legal action against a non-compliant employer. 

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