Next time you go to an Atlanta sushi or other nice restaurant, notice the
side conversations among the staff. Much of the time, it concentrates
on tips, taxes, and other paperwork that most restaurant workers know
little or nothing about.
If you work for tips, one of the more disliked conventions in the hospitality
business is the practice of tip pooling, where the wait staff makes the
tips and then is mandated to share them with the host staff, bus staff,
etc. This is different from the wait staff voluntarily giving a percentage
of tips to their co-workers, and has tax and other implications. This
practice has its own set of rules for both employers and employees, and
is easily abused by employers looking to save a few bucks here and there.
One recent interesting DOL opinion letter focused on a set of cooks in
a Japanese restaurant, who really don’t seem to immediately fall
into one of the DOL’s allowable mandatory tip pooling categories.
Tip pooling is only allowed under the FLSA for certain occupations. According
to the DOL, the following occupations have been recognized as falling
within the eligible category for tip pooling: waiters and waitresses,
bellhops, counter personnel who serve customers, busboys/girls, and service
Tipped employees may not be required to share their tips with employees
in occupations which have not customarily and regularly participated in
tip pooling arrangements, such as janitors, dishwashers, chefs or cooks,
and laundry room attendants.
So where do sushi and those table chefs at a Japanese steakhouse fit into that?
The opinion letter concludes with the notion that these chefs should participate
in tip pooling, for a number of reasons. They earned more than $30 per
month in tips themselves; they heavily interact with customers; and the
servers acted more as assistants to the chefs than the other way around.
Although there is no particular specific test, the DOL seems to historically
allow tip pooling for occupations which may not be on the list, but which,
in practice, actually have more customer contact than that position traditionally
has. Based on that, it would look like each restaurant almost has to be
evaluated separately to see how tips are being allocated.
Getting tips wrong can cost the employer and the employee big hassles in
taxes and other paperwork nightmares, and can simply drive restaurant
staff to distraction. If you have any questions about how tips are handled
in your place of employment, you would do well to
contact an employment attorney.