How Does the Tip Credit protect tipped employees under the FLSA?

Protection of tipped employees by the Department of Labor

Through 29 C.F.R. § 531.52, the Department of Labor clearly stated that tips “are the property of the employee whether or not the employer has taken a tip credit” and that an employer “is prohibited from using an employee’s tips, whether or not it has taken a tip credit, for any reason other than that which is statutorily permitted in section 203(m) of the FLSA.

Section 203(m) only allows an employer to retain a portion of a tipped employee’s tip (1)as a credit against its minimum wage obligations to the employee (i.eProtection of tipped employees, tip credit. a “Tip Credit”), or (2) in furtherance of a valid tip pool.

Based on this regulation the Middle District adopted the position that the FLSA “prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer.” See Kubiak v. SW COWBOY, INC., No. 3: 12-cv-1306-J-34JRK (M.D. Fla. Feb. 18, 2016).

If the retained tips & employer’s tip credit brought wages below minimum wage then that is certainly a minimum wage violation. Additionally, each or any of the following factors may have decreased her hourly wage to an amount below the Florida and/or federal minimum wages:

  • The amounts her employer illegally retained from her tips for not receiving at least 76% on surveys
  • Any amounts her employer claimed as a tip credit after retaining tips

If the employee’s hourly wages were brought below the minimum wage due to these or any other circumstances, employee may have a claim for her employer’s violation of the FLSA, FMWA and Article X of the Florida Constitution.

Question: I am not being paid for taking short breaks, is that illegal?

The Fair Labor Standard Act (FLSA) requires that an employer pay its employees at least minimum wage for all hours worked.  Further, it is well settled that an employer may not designate any time as unpaid break time unless (1) the time totals over 20 minutes and (2) the employee is completely relieved from his or her duties.

FLSA cases and wage type cases are fact intensive to the extreme. This means that the particulars of a given situation be reviewed. There are many circumstances wherein shorter break periods may be compensable. If you believe your employer is violating wage laws, you should consult with an experienced employment lawyer to understand your rights within the law.

Arcadier and Associates labor law experts are available to help you with your case, contact us for a consultation.

More Information:
Fair Labor Standards Act

Maurice Arcadier
Date Filed:

Our Melbourne office is centrally located in Brevard County, enabling our lawyers to serve clients throughout “the Space Coast”, including Cocoa Beach, Palm Bay and Vero Beach.

Client Review

“I continue to be impressed and grateful for Maurice Arcadier’s depth of knowledge, methodical, measured and fair legal guidance. I’ve worked and conducted business across 15 countries, but here at home, he and his law firm feel just as much business partners as legal counsel. The perspective and consideration he offers remains more-than-valuable to me as I navigate each new business endeavor. I would wholeheartedly recommend Maurice to anyone !”
Demetri K
Client Review

For a Consultation