Regulations on Tipping in the New York Restaurant Industry

Author: Stephen D. Hans

Gone are the days where servers pocketed their tips, walked off the floor, and clocked out to go home. Many people do not realize that the special tip they gave to reward a friendly smile or diligent service is frequently lost within a pool of other tips.

In January 2011, the New York Labor Department put new rules into effect that allowed restaurant owners to determine whether employees would share tips with each other or put tips into a pool and divide them up afterward. Employees eligible to receive their portion of tips generally include servers, bartenders, bus personnel, and hosts or hostesses.

The two main tipping systems allowed include:

  • Sharing tips. Servers collect tips and give a portion of them to those who bus or host.
  • Pooling tips. The restaurant assigns a tip percentage or point system for each job category and all the tips are pooled together and divided up among the staff (not kitchen employees).

Restaurant owners must maintain tips records, whether using the pooling or sharing system. According to a New York Times article  a Department of Labor investigation could result in paying employees money that extends as far back as six years. Employees can pursue lawsuits against restaurant owners for these tips as part of back wages.

From a small local restaurant to a large chain restaurant or a popular posh hot spot, restauranteurs must work out some kind of tipping system that is agreeable to employees and also meets regulatory standards.

An experienced New York employment defense lawyer can help businesses put a legally sound plan in place and also address the many other regulations required when running a restaurant. Hans & Associates, P.C.  has helped businesses handle employment issues throughout Queens and New York City for more than 30 years.

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