Attorneys James T. Carey and P. Zachary Stewart

Pursuing your Claims. Protecting your Rights.

Do tips count toward my overall pay?

On Behalf of | Dec 23, 2020 | Overtime And Wage Issues

In the workplace, classifying employees and categorizing wages can make all the difference on payday. For example, West Virginia employees who are uncertain whether their compensation is by salary, hourly wages, tips or commissions may not understand why their paychecks do not amount to what they were expecting. They may also find it difficult to support claims if filing a case against their employer for improper wages.

How should tips be handled?

Servers in an out-of-state restaurant recently stood up for their rights when their employer forced them to put their tips in a tip pool that included employees who did not receive tips. Employers sometimes include back-of-house and other non-tip employees in tip pools to avoid paying those workers minimum wage. A U.S. Court of Appeals sided with the servers on the following points:

  • Compensation that servers make through tips should bring their total wages to an average of the minimum wage for that state.
  • Because non-tipped employees at this restaurant shared in the tip pool, those tips should not have counted toward the servers’ mandated pay requirements, which dropped their wages below the minimum standard.
  • Automatic gratuities, which restaurants include for large groups, do not count as tips and should not be included in calculating employees’ wages.
  • Automatic gratuities also do not count as commission, unless they make up more than 50% of employees’ pay.

It is not an easy decision to hold your employer accountable for unfair wage and overtime practices. However, even a few hours of uncompensated time per paycheck can quickly add up. The Fair Labor Standards Act offers protection for employees to ensure they receive just wages for their time and labor.

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