Can New York businesses force workers to share their tips?

Employees in New York generally have a right to expect fair wages for their work. People in certain professions earn far more than others. Construction workers, for example, often receive a higher hourly wage than those working in restaurants or coffee shops.

Employers in service-intensive industries sometimes augment what workers earn through tips or gratuities. Customers have the option of leaving tips for the service that they received. Some businesses even have mandatory service fees that they assess on invoices for large parties and other unique circumstances.

Workers who receive gratuities typically expect to retain their income for their own use. Some may find that their employers demand that they share those tips with others. Is it legal to force workers to pool or share their tips?

New York does allow some tip pooling

There are several kinds of tip pooling that are legal under New York wage laws and others that may violate the rights of workers. It is legal for a company to require that workers combine their tips. In some cases, all tipped employees share those gratuities equally at the end of a shift.

Other times, workers receiving gratuities don’t pool their tips with one another but have an obligation to share with others by tipping them out for support services. Businesses may require that servers share their tips with bussers, dishwashers, bartenders and hosts in some cases. Such rules are typically legal and do not constitute a violation of New York wage laws.

However, employer tip pooling policies can potentially cross the line into wage violations in some cases. Insisting that workers must tip out managers or owners paid on a salary basis or pool their tips with those people is a form of wage theft. Regardless of what work someone paid on a salary basis performs, they do not have a right to deprive hourly workers of the gratuities they earned through their hard work.

When workers in the service industry realize that an employer has violated their rights, they may feel motivated to take legal action. Initiating a wage and hour claim over illegal gratuity practices could lead to more reasonable compensation for hard-working employees. Learning about New York’s unique wage and hour laws may make it easier for workers facing unfair employer conduct to stand up for themselves.

super lawyers
New York County Lawyers Association
New York City Bar
NELA Advocates for Employee Rights National Employment Lawyers Association
lead counsel lc verified