Employee tips, tip theft, and tip protection laws.

With the exception of valid tip pooling arrangements, an employer may not keep an employee's tips. The federal Fair Labor Standards Act ("FLSA") was specifically amended in 2018 to protect employee tips. 

Tip theft is illegal. Under the FLSA, an employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit. Also, the employer cannot take a portion of an employee's tips to cover certain employer related expenses, such as the cost of having cash on hand to pay out tips.

Employers cannot charge tipped employees for customers who walkout or otherwise do not pay their bill. So, costs associated with walkouts or customers who do not pay cannot be taken from tips or from any other part of an employee's wages.

If employers violate the FLSA tip law, then they may owe the employee significant wages and penalties. If your employer illegally keeps some or all of your tips, you may be owed double the amount of tips improperly kept by the employer. Also, if your employer uses a tip credit for the FLSA minimum wage law (e.g. pays you $2.13 per hour and relies on tips to make up the difference to meet the $7.25 per hour FLSA minimum wage), they will generally also have to pay you double the amount of the tip credit. 

The FLSA also requires an employer who violates the tip protection law to pay legal fees and costs to the prevailing employee's attorney. The FLSA does not require an employee to pay legal fees to the employer.

Contact Dallas attorney Allen Vaught to learn more about your tip law rights.