It is my opinion that tip pooling and tip outs are the governing of private property.

If one pools his tips he is deciding to use his tips for a pool that shares his tips with others, thus he is governing his private property. Likewise if an employee tips out other employees, the employee is using his tips to give other workers additional income, thus he is governing his tips.

Is there any reason to believe that tip pooling and tipping out are not the governing of private property?

The reason I ask is because federal laws state that nothing shall prohibit the pooling of tips among employees who customarily and regularly receive tips. Since tI believe that "the pooling of tips" is the governing of private property, it is my belief that what federal laws are stating is that an employee who customarily and regularly receives tips cannot be prohibited from governing the tips he has received.

Is there any reason why an employee who customarily and regularly receives tips shouldn't govern the tips he has received?

The reason I ask is, the U.S. Department of Labor is currently publishing opinions which suggest that the Deparmtment of Labor is authorized to govern the tips received by employees.

For instance, Opinion letter FLSA 2009-12 states,

"The legislative history includes bus persons ("busboys") in the list of occupations that may participate in tip pools, although they do not receive tips directly from the customers."

Another opinion letter which again suggests that the U.S. Department of Labor is authorized to determine who the customer's tip belongs to is FLSA 2008-18 which states,

"The DOL found that itamae-sushi chefs and teppanyaki chefs were tipped employees under the FLSA, eligible to participate in employer-mandated tip pools."

In the DOL's Field Operations Handbook § 30d04: it is again suggested that certain types of employees, are eligible to share in the tips customers present in restaurants.

My point is, who should be governing the tips customers present workers in the service industry?

The U.S. Department of Labor or the employee whom the customer chose to tip?

How can employees who customarily and regularly receive tips pool tips when the U.S. Deparment of Labor is insisting that the DOL is authorized to pool tips?

Isn't that the DOL is doing when they comprise of list of types of emplyoyees who the DOL says are eligible to share in a tip pool?

If an employee is given a tip, should he be the one deciding who is elgible to share in his tips.

Here's the kicker. While the U.S. Department of Labor is currently insisting that they are authorized to determine who is eligible to share in a tip pool. they continue to publish opinions stating that tips belong to the employee.

How can tips belong to the employee when the DOL is insisting thatthe DOL is authorized to determine who can receive a share of the employee's tips?

 

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I see your point and understand the contradiction.  I have been reading a fair amount on this topic for some articles I have written on it and think I understand their explanation of the contradiction.  The deliniation between who is eligible and not eligible for "tip sharing" (which is different than "tip pooling" or the collection of all tips to be distributed by formula) comes down to direct assistance in the service of a guest.  Because a busser, food runner, or bartender provides you with a service that contributes directly to the service of a guest, then they are eligible.  The thought being that the process is simplified by tipping the server rather tipping each of these people individually.  They have also clarified that hosts, cook, and most recently expediters/QAs (Roussell v Brinker) are not eligible for tip share because their roles assist the function of the restaurant and do not directly contribute to service.

As far as governing of private property, I think the deliniation here is more complex.  It is my interpretation that while a restaurant can set a guideline for the amount you are to tip out, they cannot require it.  The amount you leave is up to you and therefore they are not directly governing it.  I think the restaurant collecting the money or even providing a suggested amount on your checkout is not considered governing if you are not required to leave that money.  They are faciliatating the collection of money rather than enforcing it which would be considered governing.

David, What portion of the customer's tip are these other types of employees entiled to?

Now please explain how you would prove that each of these is employees is entitled to that specific portion.

Now please also emplain why someone other than the customer should be determining who his tip belongs to and what portion each is entitled to.  

The way our federal labor laws are currently being interpreted by the DOL and the courts is, employers are not prohibited from requiring tip pools, which include tip outs.

It does not simplify things to view tips as property belonging to employees whom the customer could have tipped but didn't. All it does is, it allows employers to take tips away from those who are personally presented tips with absolutely no evidence what-so-ever substantiating the reason for why the tips are being take away. When tips are errantly viewed as that which belongs to all those who provided service to the employee, tips become a complicated mess that can never be figured out. This line of service concept does not simplify things, It does nothing but create conficts and unsolvable problems.

When tipa are erranly regarded as as money that belongs to all those who provide service to the customer the only real evidence  that exists as to who the tip belong to must be disregarded. That evidence is who is who was the tip presented to and who is immediately  in possession of the customer's tip. When tips are properly viewed as the sole property of the person who was presented such tips then things are simplified. We know who the tip belongs to and what amount belongs to them. The customers who present tips as money belonging to the person whom they chosen to tip can be assured that no on, ohter than the employee whom they've chosen to tip will steal their tip.

Your take on this matter is nothing but meaningless rhetoric geared at preventing employees from claiming the tips customers have chosen to tip them.. Customers do not leave a wirtten and documented detail of how their tps should be divided up among all those who you think should be entitled to their tip. Because there is no evidence to prove that those who provide service to the customer are entitled to a portion of the customer's tip, business owners, along with the courts and government agencies should get their greedy hands off those tipped employee's tips.  

Your explanation doesn't make sense at all. You have absolutely no proof what-so-ever to suggest that an employee who is given a tip is not solely entitled to the tip he has been given.

 


G D Reed said:

David, What portion of the customer's tip are these other types of employees entiled to?

A guideline of 15% had been contained in the Dept of Labor's Field Operations Handbook in Section 30d04.  As of May 5, 2001, that wording was replaced with “Section 3(m) does not impose a maximum contribution percentage on valid mandatory tip pools, which can only include those employees who customarily and regularly receive tips.”

Now please explain how you would prove that each of these is employees is entitled to that specific portion.

Now please also emplain why someone other than the customer should be determining who his tip belongs to and what portion each is entitled to.  

Let me address these three together.  The key here is that they aren't entitled to it, but rather than an agreement exists.  Rather than each server negotiating a fair amount with each busser/bartender/etc for each shift, a guideline is accepted throughout the restaurant on behalf of the servers.  This is explained in 29 CFR 531.52"In the absence of an agreement to the contrary between the recipient and a third party, a tip becomes the property of the person in recognition of whose service
it is presented by the customer."  The amount of the tip out is considered a third party agreement with those recieving it.  You could choose as a staff to not provide a tip out, but it would probably make it impossible to hire bussers or bartenders willing to provide you any service.

The way our federal labor laws are currently being interpreted by the DOL and the courts is, employers are not prohibited from requiring tip pools, which include tip outs.

The law is actually pretty clear cut on this one.  29 CFR 531.53 

"Where employees practice tip splitting, as where waiters give a portion of their tips to the busboys, both the amounts retained by the waiters and those given
the busboys are considered tips of the individuals who retain them, in applying
the provisions of section 3(m) and 3(t). Similarly, where an accounting is made
to an employer for his information only or in furtherance of a pooling
arrangement whereby the employer redistributes the tips to the employees upon
some basis to which they have mutually agreed among themselves, the amounts
received and retained by each individual as his own are counted as his tips for
purposes of the Act."  I have maxed out of space to reply and time before work.  I will finish after my shift.



G D Reed said:

It does not simplify things to view tips as property belonging to employees whom the customer could have tipped but didn't. All it does is, it allows employers to take tips away from those who are personally presented tips with absolutely no evidence what-so-ever substantiating the reason for why the tips are being take away. When tips are errantly viewed as that which belongs to all those who provided service to the employee, tips become a complicated mess that can never be figured out. This line of service concept does not simplify things, It does nothing but create conficts and unsolvable problems.

Now I am not trying to advocate for the current system, but rather trying to explain it.  The FOH gives a list of employees who are eligible (FOH 30d04a) and those who are not eligible  (FOH 30d04c).  The way they determined this is list by considering those "customarily and regularly" recieving tips or tips share.  The bright line seems to be the degree of direct service or what a server would generally be required to do in the absence of somone filling that position.  It is an imperfect determination, but it seems the be what they are going off of.

When tipa are erranly regarded as as money that belongs to all those who provide service to the customer the only real evidence  that exists as to who the tip belong to must be disregarded. That evidence is who is who was the tip presented to and who is immediately  in possession of the customer's tip. When tips are properly viewed as the sole property of the person who was presented such tips then things are simplified. We know who the tip belongs to and what amount belongs to them. The customers who present tips as money belonging to the person whom they chosen to tip can be assured that no on, ohter than the employee whom they've chosen to tip will steal their tip.

Don't get me wrong, I hate tipping out as much as the next guy.  If the question is whether or not it is legal, the courts and DoL have conclusively decided it is.  I would love to keep all of my tips.  I would also like to be paid a decent wage.  None of those things are within my control.  If you want to lobby Congress, I will support you.  If you want to start a campaign to educate the public, I am with you.  Unfortunately, the laws as the stand are not on your side.



G D Reed said:

Your take on this matter is nothing but meaningless rhetoric geared at preventing employees from claiming the tips customers have chosen to tip them.. Customers do not leave a wirtten and documented detail of how their tps should be divided up among all those who you think should be entitled to their tip. Because there is no evidence to prove that those who provide service to the customer are entitled to a portion of the customer's tip, business owners, along with the courts and government agencies should get their greedy hands off those tipped employee's tips.  

It's not just rhetoric.  I have spent time in the CFR and FOH.  I have read many cases.  I have written two posts recently explaining significant recent cases regarding tipping and service charges.  You acknowledge in your original post that the law is clearly allowing it.  We could have a theoretical debate on whether or not it is right, but your rhetoric doesn't change the law. 

Your explanation doesn't make sense at all. You have absolutely no proof what-so-ever to suggest that an employee who is given a tip is not solely entitled to the tip he has been given.

I'm still lost on this point.  You sited precedent in your original post that proves that an employee is not entitled to the tip.  The rulings and the letters of clarifications make it clear.  If you want to argue whether or not they should be entitled to the tip, that is one thing.  The courts and DoL are very clear that they are not entitled to retain all of the tips where a tip sharing agreement is in place.

 

I do not acknowledge, and have never acknowledged that the law is clearly allowing employers to require tip pools. What I stated is that currently the DOL is misintterpreting the law by allowing employers to require tip pools.

Think about it, what right would the DOL, or anyone for that matter, have to compile a list of types of employees who are eligible to share in the tips a customer gives? Please think about this simple concept. Tips belong to the customer until such time that he gives them to someone else. Now why would someone other than the customer or the person to whom they gave their tip have a right to determine who was eligible to share in the customer's tip. Don't you see how ridiculous such logic is?

Federal laws do not attempt to list types of employees who the customer's tip can be shared with. The point I am making is, there is no statutory support for the idea that the DOL is authorized to determine who the cusotmer's tip belongs to. It's the same mistake the DOL made when they suggested tthat a tip pool could not require an employee to contribute more than 15 percent of his tips. There is no statutory support. The thing is, there is no statutory support also for the idea that an employee can be required to contribute anything to a tip pool. The regulations who cite, along with every statute I've read are silent on the idea that it is legal for an employee to be required to contribute his tips to a tip pool.

Such requirements would be dependent on a legally binding contract the employee may have entered into. However, this contract is not suggested as something employers and their employees enter into when we are talking about a "TIP POOL". If an employer and an employee enter into an agreement where  the employee will be required to give up his tips, the money ceases to be considered tips. Please read CFR 531.52

I don't think you have a grasp of this agreement to the contrary who refer to. It's an agreement the recipient enters into which can change who the customer's tip ultimately belongs to. No one other than the recipient of the customer's tip is listed as someone with the authority to enter into an agreement concerning the tips he or she has received. Clearly if one is authorized to enter into a legally binding agreement regarding some property, the property must belong to that individual. The regulations you cite acuallyy support my opinion that tips belong to the recipient not "possible recipients" of the cusotmer's tip.

 

 

G D stated, David, What portion of the customer's tip are these other types of employees entiled to?

Davide replied A guideline of 15% had been contained in the Dept of Labor's Field Operations Handbook in Section 30d04.  As of May 5, 2001, that wording was replaced with “Section 3(m) does not impose a maximum contribution percentage on valid mandatory tip pools, which can only include those employees who customarily and regularly receive tips.”

So your answer is, the waiter is not entiled to any portion of the tips he is given because there is no maximum contribution amount on what his emlployer can mandate he contribute.

Please read what I am saying here very carfully. Does it make sense that federal laws would go to the trouble of stating that all tips received by the employee are to be retained by the employee and then turn around and suggest that the employee can be required to give up an unlimited amount of his tips?

Read my lips. Section 203(m) is not suggesting that it is legal for an employer to require that an employee give his tips up to a tip pool where there are no limitations on what his employer can take away from him.

As far as answering my question as to what portion each of the other employees is entitled to retain as their own, your answer is, oh none of them are really entitled to a portion, the restaurant has agreed, on behalf of the waiters, as to what portion each should receive.

You went on to state that no one is entitled to a tip, but rather, an agreement exists.

G D stated,

Now please explain how you would prove that each of these is employees is entitled to that specific portion.

Now please also emplain why someone other than the customer should be determining who his tip belongs to and what portion each is entitled to.  

David stated,

Let me address these three together.  The key here is that they aren't entitled to it, but rather than an agreement exists.  Rather than each server negotiating a fair amount with each busser/bartender/etc for each shift, a guideline is accepted throughout the restaurant on behalf of the servers.  This is explained in 29 CFR 531.52"In the absence of an agreement to the contrary between the recipient and a third party, a tip becomes the property of the person in recognition of whose service
it is presented by the customer."  The amount of the tip out is considered a third party agreement with those recieving it.  You could choose as a staff to not provide a tip out, but it would probably make it impossible to hire bussers or bartenders willing to provide you any service.

You didn't answer any of the questions I asked.

Again, how do you prove that each of these employees is entitled to a specific portion?

Again, how do you prove what portion each is entitled to?

What you are insisting is that the employer should decide such matters on befalf of the waiters. Why? Are customers giving their tips to the business owner so he can spend the money as he chooses.

Please read what CFR 531.52 has stated about tips after it mentions your agreement to the contrary.

"Only tips received as money belonging to an employee which he may use as he chooses free of any control of the employer may be counted in applying the provision of section 203(m)".

Did you read the regulations that you just posted? CFR 531.54 clarifies the fact that the basis for how tips will be redistributed trough a tip pool is supposed to be mutually agreed upon among the employees themselves.

Are waiters mutually agreeing when their employer decides on their behalf?

It's called employer required tip pooling. David, we are not talking about a tip pool where employees have voluntarily chosen to pool tips. We are talking about where employees are required to pool their tips.

The truth of the matter is employers don't have to put in writing any agreement with employees unless the employees are represented by a union, and even then, employers don't have to put anything in writing, they can simply refuse to negotiate. That's the way our labor laws work due to at will employment doctrine and our right to work laws.

This agreement you insist exists, doesn't exists. Employees are being extorted into an agreement which is open ended and not even in writing. If an employee refuses to let his employer control his tips, he will either be fired or refused the job. Does that really sound like an agreement to you?

David, when you read CFR 531.54 please keep in mind that the tip pooling that CFR 531.54 is speaking of is one where each person receiving tips from the pool is receiving tips as money belonging to him which he may use as he chooses "FREE OF ANY CONTROL OF THE EMPLOYER".

An employer required tip pool does not result in an employee receiving tips free of any control of the employer. It results in some employees receiving tips directly due to the fact that their employer is controling who will receive a share of tips and what portion they will receive.  When tips become the property of those who receive them through a tip pool it is supposed to be understood as a tip pool which not controled by the employer.

David, the reason you cannot answer my questions is, your understanding of tip pools and the laws that address them are flawed. Federal laws prohibit employer required tip pools due to that fact that federal laws state that nothing in this subsection shall be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips. 

When a employer exerts control over tips, the money cannot be considered tips. CFR 531.52 along with CFR 531.55 make this point perfectly clear.  When an employer exerts control over tips by mandating how they will be used, the pooling of "TIPS" is thus prohibited. How can tips be pooled among anyone when the tips cannot be considered tips?

An emloyer who requires tip pooling or tip outs is prohibiting his employees who customarily and regularly receive tips from pooling "TIPS".

Here is the truth. Pooling tips is the same as spending one's tips. When an employer requires tip pooling, he is spending his employee's tips. When an employer spends his employee's tips, the employee is prevented and thus prohibited from spending his tips.  Thus, an employee who has been required to pool his tips is and employee who is prohibited from pooling his tips.

 



David Hayden said:

Now I am not trying to advocate for the current system, but rather trying to explain it.  The FOH gives a list of employees who are eligible (FOH 30d04a) and those who are not eligible  (FOH 30d04c).  The way they determined this is list by considering those "customarily and regularly" recieving tips or tips share.  The bright line seems to be the degree of direct service or what a server would generally be required to do in the absence of somone filling that position.  It is an imperfect determination, but it seems the be what they are going off of

David, what I want to know is why the Department of Labor is suggesting that they are authorized to determine who is or isn't eligible for a share of the customer's tip?

Federal laws do not list types of employees who are eligible for a share of the customer's tip. Federal laws do not state that the Deparment of Labor is authorized to determine who the customer's tip belongs to.

My point is, I don't care what the DOL's opinion is when it is blatantly obvious that they are simply pulling it out of their ass. Do you understand? The DOL is making up lies, not opinions. Provably inaccurate and deceptive lies.

Neither federal laws or federal regulations mention anything about certain employees being eligible for a share of the customer's tip. There is absolutely no statutory support for the idea that the DOL is authorized to determine who is or isn't elible for a share of the customer's tip.

The only thing this blatant lie accomplishes is, it prevents an employee from claiming that he is entitled to the tips he has received. How can an employee claim that the tips he has received belong to him, when there is a blatant lie being perpuated and utilized by the courts which insists that the U.S. Department of Labor is authorized to determine who tips belong to?

The kicker is, while the courts are utilizing this lie to disentitle employees to the tips they have received, the DOL blatantly refuses to clarify who tips accually belong to and what amount the employee is entitled to retain as his own. The results are, no employee can claim that he is entitled to a certain amount of the tips he has been given.

How convenient for employers. While federal laws explain that employers must allow their employee to retain all the tips he has received, the DOL insists that no employee is entitled to retain all his tps and at the same time, refuses to address how much the employee is entitled to retain as his own.

While federal laws explain that nothing is to prohibit the pooling of tips among employees who customarily and regularly receive tips, none of the employees can prove what amount they are entitled to retain as their own. How can employees who customarily and regularly receive tps pool their tips when none of them can prove that they are entitled to them. Only the DOL is authorized to determine who tips belong to. Isn't that exactly what the DOL is suggesting in their FOH?

 

 

Again, how do you prove that each of these employees is entitled to a specific portion?

Why would anyone have to prove that each or any team members are entitled to a specific portion?

Distribution formula is pre set prior to the rendered service, guest doesn’t know about this but also doesn’t care who participated in providing him/her with a proper service.

Tip on the check is not given to a person who dropped it at the table but to the team of “tipped employees” who provided the oveall service.  



gratuityshaker said:

Again, how do you prove that each of these employees is entitled to a specific portion?

When tips are errantly regarded as belonging to all those who provide service to the customer, none of the employees can prove what portion they are entitled to. When tips are errantly regarded as that which does not belong to the employee who was presented the tip, there is no way to prove who the tips belong to and how much each is entitled to.

Why would anyone have to prove that each or any team members are entitled to a specific portion?

The reason why a worker needs to be able to prove what portion of the tips he is entitled to is because federal laws state that all tips received by the employee are to be retained by the employee. If an employee has no way of knowing what portion of his tips he is entitled to, it becomes impossible for him to retain all the tips he has received. Federal laws cannot protect employees to the tips they have received if it's impossible for any one of them to prove exactly how much he's entitled to retain as his own.

Likewise, Federal regulations explain that nothing in this subsection shall be construed to prohibit employees who customarily and regularly receive tips from pooliing their tips, "as where the waiters give a portion of their tips to the busboy". If an employee doesn't know what amount of tips he is legally entitled to consider his own, then he is unable to give part of his tips to other workers. How can an employee give part of his tips to other workers if he has no way of proving what tips belong to him?

Distribution formula is pre set prior to the rendered service, guest doesn’t know about this but also doesn’t care who participated in providing him/her with a proper service.

Distribution formulas should be set by either the customer or the employee who was given the tip. Any other distribution is unauthorized and unlawful. We are talking about private property.

Tip on the check is not given to a person who dropped it at the table but to the team of “tipped employees” who provided the oveall service.  

How dare you tell me who my tips are given to. Don't you get it? Tips belong to who ever the customer chooses to tip, not to whom-ever you or someone else says they belong to.

There is absolutely no evidence to support your bogus claim that tips on a check are given to, or intended for, all employees who provided service. There is evidence to support the idea that a tip presented on a check belongs to the employee who handles the check. If customers don't want the employee who handles the check to claim the whole tip as his own, the customer has every ability to include a written discription of how the tips should be dsitributed. If there is no expaination included on the check explaining that others should share in the tip, then th employee who handled the check should have every right to claim it as his own. Possession is 9/10ths of the law.

When tips are properly regarded as the property of the employee who was personally presented the tip, there is no confusion as to who the tip belongs. When there is no confusion over who the customer's tip belongs to, unscrupulous business owners are less likely to be able to steal the tips for themselves. When tips are vaguely construed as belonging to some ambigous group of workers, the door is open for employers to steal their worker's tips. When employees have no means to prove that a certain amount of tips belong to them, employers are able to steal the tips for themselvres.

That's why employees need to be able to claim tips as their personal property. If they can't claim tips as their personal property, then resolving who the tips actually belong to will be impossible and employers will be free to steal the tips for themselves. Don't you get it? If tips are regarded as belonging to some vague group of workers and if the details as to how much each is entitled to is an impossible task to sort out, then none of the employees will be protected to the tips.

When tips are viewed as peoperty not belonging to a specific person, then there becomes no means to discern who the tips actually belong to and employers can take the tips for themselves. Both Federal  and state laws all seem to point toward an intent to prevent employers from stealing their worker's tips. But if no worker can substantiate that a he is entitled to a certain amount of tips, federal laws become meaningless and employees will not be protected.

Those who say  that tips belong to all those who provide service to the customer are simply trying to aid employers in contravening federal law. When tips are regarded in such an uncaring and unresponsible manner, our laws cease to protect employees the way they were intended to protect employees.

 

Federal laws state,

 

"All tips recevied by the employee are to be retained by the employee"

An employee cannot retain all the tips he has received unless he knows what tips constitute all tip recevied.

When tips are improperly viewed as not belonging solely to the emplyee who received the tip, the employee has no way of knowing how much he is entitled to retain as his own. If an employee has no way of knowing how much he is entitled to retain as his own, then he will be unable to retain all the tips he has received. That's what business owners want. The want their employees to be unable to retain all the tip they have received. The reason being, business owners want to retain the tips for themselves.

If you look into case law on this topic what you will find are many court cases asserting that while a tip doesn't belong solely to the employee to whom it has been presented, there is no concern at all over who the tips actually belong to. It's as if the sole intent of the courts has been to  rule that tips don'[t belong to the person who was given the tip. No details have been given as to what portion the initial recipient is entitled to and what portion others are entitled to. They sole purpose of these court rulings seems to be to simply make sure no employee has any legal entitlement to the tips customers present them.

The courts have never ruled that a waiter is entitled to 85 percent of the tips he has received. The courts have never ruled that busboys are entitled to 15 percent of the tips waiters receive. The only consant found among these numerous court cases is an overwhelming agreement that tips don't belong exclusively to the person who was given the tip. So there we are.

While Federal laws state that all tips received by the employee are to be retained by the employee, the courts simply say, without any proof to back up their claim, an employee has no right to retain all the tips he has received. End of story. Screw fedreal laws. What the courts are suggesting is that customers don't want the employee to retain all their tips and because judges know this to be a fact, federal laws do not apply. It's not a fact. It's a made up lie aimed directly at aiding business owners in stealing the tips customer's present their workers. This is the truth and it will not go away.

 

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