Employees who work for tips should look closely at what they earn and be careful about their employer’s rules regarding their tips. There’s no guarantee that your employer is going to protect your rights under wage laws. It might be up to you.
There are some specific rules, under both state and federal law, on wages. Some relevant laws for tip earners are those that address tip sharing, minimum wage and hourly pay.
Employers are allowed to pay a reduced hourly wage to employees who earn tips. This is called a tip credit rate. Obviously, this reduced hourly rate is a big benefit to an employer, which is why there are laws to protect these employees.
Tip sharing is a big issue. The main thing to know is that your boss can’t share your tips and they can’t make you share your tips with workers who don’t get tips. No managers, cooks or dishwashers should be taking any part of your tips. You can, however, share your tips with other tipped employees. If your employer has set up tip splitting or pooling, that is generally allowed.
Another issue is minimum wage. It does still apply. Even though you earn a reduced hourly rate because you get tips, the grand total of your pay should be at least minimum wage. You are entitled to that. If there is a discrepancy, and you are not earning minimum wage, your employer might have to pay the difference.
There are some situations where an employee receives some tips and earns a reduced hourly rate but they’re required to do a lot of things for which they don’t get tipped. This is unfair and in some cases not allowed under the law. If you have to do a lot of administrative duties, maintenance, opening and closing tasks, meetings, etc., then you might be entitled to minimum wage for all the hours you work.
If you are earning overtime pay, be sure it’s being calculated correctly. It’s not correct to simply multiply your reduced hourly rate by 1.5. Your employer is supposed to pay you 1.5 times minimum wage, minus the tip credit. If they are doing this wrong, then you may have a claim for unpaid overtime.
Don’t leave money on the table. Talk to an experienced Illinois employment attorney to find out whether you have a case worth pursuing. We are happy to speak with you for free at any time.