My tips funding “event fund”

[Branfl4kes]

I’m part of a catering crew in Northern Virginia where the cost of living is high.
My company was recent bought out by a franchise and has created a new policy in regards to tipping.
I make $15/hr, and my tips for deliveries through the catering department is limited to $50. Anymore than this that is tipped goes into an “event fund” that will benefit other employees, including those who are not regularly tipped employees such as the kitchen staff.

In this area, tips are regularly from $100-300 easily, and I am not given many hours a week. Is it legal for this company to take large sums of tips directed to me?

 

[LdiJ]

I’m part of a catering crew in Northern Virginia where the cost of living is high.
My company was recent bought out by a franchise and has created a new policy in regards to tipping.
I make $15/hr, and my tips for deliveries through the catering department is limited to $50. Anymore than this that is tipped goes into an “event fund” that will benefit other employees, including those who are not regularly tipped employees such as the kitchen staff.

In this area, tips are regularly from $100-300 easily, and I am not given many hours a week. Is it legal for this company to take large sums of tips directed to me?

Having a tip pool is not of itself improper but since you apparently are not participating in the pool, while you have to direct the bulk of your tips to that pool, its questionable for sure. Also, its questionable for back of the house employees to benefit from the pool.

However, at the same time, you are paid a full wage, not the normal type of wage that a tipped person receives, and the question kind of is, are the customers actually tipping you, or are they tipping the house? Our company uses caterers often, and my boss is a generous tipper, but he is always tipping the house when he tips a caterer, not the delivery person.

You are probably best served by running your situation past a local employment attorney to get their take on it.

 

[justalayman]

Retention of Tips by Employee: All tips received by a “tipped employee” must be retained by the employee except to the extent that there is a valid pooling arrangement. The employer cannot require a tipped employee to turn any portion of his tips over to him

From the Virginia minimum wage act.

I suspect your situstion, along with lidij’s example, are illegal (in either state) unless the person paying the “tip” specifies it isn’t meant as a tip for the employee and is designated for the employer (where the employee would simply be receiving for and delivering to, the “tip”, to the employer)

Of course the employer can demand you accept no tips what so ever, which is wholly legal in either state as well.

So it’s going to depend on the intent of the tipping party.

 

[LdiJ]

From the Virginia minimum wage act.

I suspect your situstion, along with lidij’s example, are illegal (in either state) unless the person paying the “tip” specifies it isn’t meant as a tip for the employee and is designated for the employer (where the employee would simply be receiving for and delivering to, the “tip”, to the employer)

Of course the employer can demand you accept no tips what so ever, which is wholly legal in either state as well.

So it’s going to depend on the intent of the tipping party.

I do question however, whether the OP meets the definition of a "tipped employee" for the purpose of the law, since the employee makes a standard wage (not a reduced tipped employee wage).

The American federal government requires a wage of at least $2.13 per hour be paid to employees that receive at least $30 per month in tips. If wages and tips do not equal the federal minimum wage of $7.25 per hour during any week, the employer is required to increase cash wages to compensate.

The OP makes 15.00 per hour, which is more than 7 times the tipped employee minimum wage. I think that has to factor into the mix. Again, I do think that the OP should run the situation by a local employment attorney.

 

[FlyingRon]

I disagree. The definition of tipped employee is clear. The tipped employee is one who customarily is tipped and receives more than $30 a month regularly. There's no requirement that they be paid the sub-mimimum wage, it's only that the law allows the tips to be creditted towards that. About the only thing that the base pay being above the minimum wage means is that the entire tip amount can be pooled (otherwise only that above the amount used in the tip credit can be pooled).

Tip pooling is not illegal, but disbursing the tips to those who are not normally tipped (BOH, managers, owners) is CLEARLY illegal.

This is the FEDERAL law. Virginia law is in harmony with this. In fact, the Virginia statutes and guidance is pretty clear on what is and is not a tipped employee. The poster appears to be one and that some of the BOH people are not eligible for the pooling.

 

[HRZ]

DItto , prior poster FlyingRon has nailed a big abuse area....

"Tip pooling is not illegal, but disbursing the tips to those who are not normally tipped (BOH, managers, owners) is CLEARLY illegal".

 

[justalayman]

Our company uses caterers often, and my boss is a generous tipper, but he is always tipping the house when he tips a caterer, not the delivery person.

this has never made sense to me. Why not just agree to pay a higher fee for the services? That way it figures into business expenses. On top of that how it is delivered could be problematic. If it appears as a tip to to whomever it is handed to and it really is supposed to go to the business, maybe consider an envelope with the owners name or such. Otherwise it could result in a situation where it looks like the company is taking the employees tips.

 

[LdiJ]

this has never made sense to me. Why not just agree to pay a higher fee for the services? That way it figures into business expenses. On top of that how it is delivered could be problematic. If it appears as a tip to to whomever it is handed to and it really is supposed to go to the business, maybe consider an envelope with the owners name or such. Otherwise it could result in a situation where it looks like the company is taking the employees tips.

I think that the difference perhaps is the caterers that we use. They are more of mom and pop type shops and the delivery person is often a member of the family who does a lot more than just deliver the food. My boss likes doing the tipping to the house because he feels like we get an overall better experience because he is known as a good tipper.