This one’s short and to the point *pulls out bullhorn*: YOU CANNOT DO INDIRECTLY WHAT YOU CANNOT DO DIRECTLY.
Since the Trump Administration rolled out the new tip pooling regulations, we’ve all gotten some much needed clarity on what used to be a complete cluster of contradictions. In fact, the new law’s actually shockingly simple, which leads to my even greater shock of why some employers are still breaking it. Because they don’t think that they are, Lexi. Because they don’t think that they are.
Here’s how it happens:
Employer takes a tip credit. Employer requires tip credit employees to pool with others in the front of the house. Employer “strongly recommends” that they “kick a little to the folks in the back too” because “they work just as hard” and “it’s part of being a team player” and “we’re all in this together.” Employer tells themselves that they haven’t broken the law because it was only a suggestion and their employees know that they don’t have to give anything to the people in the back. But…do they?
Say it with me here, folks: Tips. Are. The. Sole. Property. Of. The. Employee.
Your involvement with those tips is limited to very specific circumstances depending on how you pay them. If you take a tip credit, your only allowed involvement is to require that they pool with other employees who regularly receive tips (i.e., front of house). You have no say or authority whatsoever on any other place that those tips should go. That includes suggesting, recommending, advising, proposing or any other word that could possibly be construed as requiring your tip credit employees to pool with anyone other than the front of the house.
You don’t have to hold a lighter to your employees’ paychecks to effectively “require” that they do something. You’re the authority – the gatekeeper between them and their jobs – and “suggestions” or “recommendations” from authority have a funny way of appearing to be requirements.
Now, is it a certainty? No. A suggestion sometimes appears as just that – a suggestion. But if the consequences of not following your suggestion make your employees feel ostracized, punished, or that their participation is in any way a condition of their continued employment, then yes, even if you haven’t used the words, your “suggestion” may very well be considered to be a requirement in the eyes of the law.
So, here’s the takeaway: Don’t deceive yourself into breaking the law on a technicality. If you want your employees to pool their tips with the back of the house, just pay them a straight minimum wage. That’s the beauty of the new law after all – clear as the day is long. But if you’re going to take a tip credit, stay out of anything other than requiring that they pool their tips with the front of the house. No matter how you may try to couch it, remember when it comes to the law: if it looks and quacks like a duck, that duck’s probably illegal.