Tipped Employees/Minimum Wage

Tipping is an acceptable practice in most service-oriented employment at restaurants, hotels and other establishments, where employees provide direct service to their customers. For waiters, busboys and other service employees, tips form a big part of their wages. No part of any tips or gratuities customers given directly to employees, or intended for the benefit of the employees, can go to the employer.

If any employee who is also a supervisor shares in the tip pool or takes any part of the tips, the employer loses the “tip credit,” which means the employer owes each employee the regular minimum wage, instead of the “tipped” minimum wage. This can make a big difference in what you are entitled to. Similarly, if any part of the tip pool goes to an employee who is not involved in serving the customers, the employer can lose the “tip credit” and owe everyone in the tip pool the regular minimum wage instead of the tipped minimum wage.

Tip Credit Violations

There may also be a tip credit violation if any part of the tip pool goes to the management in any way. This can also result in a loss of the tip credit, and liability to all the employees for a regular minimum wage violation. This can make a tremendous difference where you have worked in the same restaurant for several years, or when there is also an overtime violation.

It is also important to remember that your percentage of any tips cannot reduce your wages below the minimum wage. So, if your employer collects some or all of the tips you are given, you may have a claim against your employer, both for the regular minimum wage for non-tipped employee, and to “disgorge” (or get back) money taken out of your tips by the employer.

Minimum Wage Violations

Minimum wage laws are in place to ensure that workers are paid a basic wage, meaning you must be paid for all the hours you work and must not be paid less than the minimum wage per hour. Your employer cannot make a lump sum payment to you in cash, which is less than the minimum wage for each hour that you worked. There are very few exceptions to minimum wage laws in New York.

Regardless of your job or immigration status, that law requires that you are paid at least the minimum wage. Anyone can file a minimum wage claim, but the minimum wage rules are different for many tipped employees.

Our Legal Services

The Law Offices of William Cafaro have handled hundreds of minimum wage claims, as well as collective and class action suits on behalf of workers who were paid incorrectly. We are dedicated to defending your rights when an employer tries to take advantage of you.

Our attorneys also have resolved many tip credit violation lawsuits for individuals and classes of employees who were denied their tips.

Contact a New York Employment Law Attorney

If you believe you may be owed money for any kind of “tip credit” or minimum wage violation, contact our law firm at (212) 583-7400. Arrange a confidential consultation to discuss your situation with an attorney and find out if you have grounds for a claim. There is no charge for an initial consultation and you don’t pay any attorney fees unless we are successful in obtaining compensation for you.

Law Offices of William Cafaro


108 West 39th Street
Suite 602
New York, NY, 10018


Fax: (212) 583-7401

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