Tip Credits and Tip Pooling in Texas

Here’s a topic that applies to everyone—even if they have never worked in the foodservice industry or intend to. You would have a difficult time finding a person who has never tipped someone before.

And most people may be a little surprised to know that the money they tip their waiter may not go to him. At least, not all of it. Learn how tip credits and tip pooling work in Texas.

Tip Credits

Another misconception is that a waiter or waitress is getting additional money because of your tip. This is where tip credits come in. Most state and federal laws allow for employers to pay their employees less than minimum wage. The tips the employees receive can make up the difference. Regardless, the employer is responsible for making the difference if the tips do not allow the employee to be paid or above minimum wage. This is known as tip credits.

In Texas, tipped employees make at least 2.13 an hour (excluding tips).

Tip Pooling in Texas

Tipping out is also referred to as tip pooling. Employees pool their tips together, and they get distributed equally. Again, this may not be as clear-cut as it appears. Are these tips shared with non-tipped employees such as cooks? Are managers entitled to receive a portion? If a waiter spends half his shift cleaning and prepping, can he get tips during that time?

Some laws and regulations answer all these questions. And it is essential for employees and employers alike to understand them. For one, if an employer chooses to claim a tip credit, the employees are not required to share tips with non-tipped employees.

Regarding the waiter who spends part of his shift not collecting tips, whether he can receive tips during that time depends on his tasks. He can receive tips if his secondary role is connected to his primary one. So if he spends the last hour of his shift managing payroll and writing out schedules for employees, then he likely wouldn’t be entitled to tips. The managerial role he is assuming is not related to his tipped duties.

And managers and employers do not receive any portion of the tip pool.

Ask Our Team about How Tip Credits or Tip Pooling Applies to You

Losing the money you are owed due to the misappropriation of tips is only one example of an employee not receiving accurate wages. If you have a wage claim or have other legal questions surrounding employment law to include retaliation or discrimination, contact Amsberry Law to schedule a free consultation.

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