Proven Results No Matter the Case
As lawyers for the workers, we make sure that employers pay you for the long hours you put in and give you the wages you are owed.
WHAT IS TIP THEFT?
Tip theft occurs when employers illegally withhold, mismanage, or take a portion of the tips earned by their employees. This unfair practice can significantly reduce the earnings of service workers who rely on tips as a primary source of income.
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HOW EMPLOYERS STEAL TIPS
Employers may engage in tip theft in several ways, including:
- ⚠️ Mismanaged Tip Pooling: While tip pooling is legal in certain cases, employers sometimes include managers or non-tipped employees, illegally reducing the amount workers receive.
- ⚠️ Withholding Tips: Some employers illegally keep tips, claiming they count toward the worker’s base wage.
- ⚠️ Misclassifying Tips: Employers may label tips as "service charges" or other payments to avoid properly allocating them to employees.
Your Rights as an Employee
Remember: Legally, tips belong to the employees who earn them—not the employer. If your employer takes, withholds, or mismanages your tips, they can be held accountable.
As an Employee You Have the Right To:
- Keep 100% of your earned tips (unless a legal tip pool applies)
- Refuse to share tips with managers or non-service employees
- Be paid at least the federal or state minimum wage, regardless of tips
- Take legal action if your employer is stealing your tips
📌 Is your employer taking part of your tips? You may be entitled to compensation for lost wages. Contact Josephson Dunlap for a free case review and learn how we can help recover the money you deserve.
Call us at (888) 992-2990 or submit a secure contact form today to set up a complimentary consultation with one of our employer tip theft attorneys.
Can Employers Pay Tipped Employees Less Than the Minimum Wage?
Employers cannot pay any employee—including tipped employees—less than the applicable federal, state, or local minimum wage. However, some states allow businesses to use a tip credit, which reduces the direct hourly wage an employer must pay, assuming that tips will make up the difference.
How Tip Credits Work
A tip credit is the difference between an employee’s base pay and the minimum wage. The expectation is that tips will cover the shortfall. If they do not, the employer must make up the difference.
Example: Texas Tip Credit
- Texas allows a tip credit of $2.13 per hour (as of 2023).
- The state minimum wage is $7.25 per hour.
- Employers can pay tipped employees as little as $5.12 per hour, expecting tips to cover the additional $2.13 per hour.
- If an employee’s tips do not bring their total earnings to at least $7.25 per hour, the employer is legally required to pay the difference.
💡 Tip laws vary by state and even by city. Some states do not allow tip credits, while others have specific regulations governing how tips are handled. If you believe you have been underpaid due to improper tip credit calculations or tip theft, contact our attorneys for a free case review.
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