Federal Court Allows Tip Pooling

Under a recent court ruling, a restaurant employer may require servers to pool tips and even distribute a portion of that tip pool to cooks, dishwashers, supervisors and other employees who are not commonly tipped.


However, this ruling only affects restaurant employers who pay servers at least the minimum wage. If the employer takes advantage of a tip credit under federal or state law, then employees are entitled to keep their own tips.


In Cumbie v. Woody Woo, Inc., a class-action suit, the 9th Circuit Court of Appeals ruled that because the restaurant paid servers a wage that was $2.10 per hour more than the minimum wage, the employer could force servers to pool 100% of tips earned. The tip pool was then split between servers and kitchen staff. Normally in the restaurant industry, cooks and other back-of-the-house employees do not share in tips, but are paid much higher wages than food servers.


The lawsuit concerned food servers at Vita Café in Portland, Oregon, a casual restaurant that serves healthy cuisine with a focus on vegetarian and vegan meals.


Under the arrangement at Vita Café, Continue reading

North Carolina Tipped Minimum Wage Decrease

The minimum wage for tipped employees in North Carolina has been reduced to $2.13  per hour, for now, despite the increase in the state and federal minimum wage on July 24, 2008.


On July 24, both the federal and North Carolina minimum wages increased to $6.55 per hour. However, employees who earn at least $30 per month in tips can be paid less.


Until recently, the minimum wage for tipped workers in North Carolina was Continue reading