Acton Institute Powerblog

Employers should fulfill their obligations to tipped employees

Share this article:
Join the Discussion:

Free weekly Acton Newsletter

A tipped employee engages in an occupation in which they customarily and regularly receives more than $30 per month in tips, according to the Department of Labor. An employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage. If the employee’s tips combined with the employer’s direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference.

But what happens when tipped employees, such as restaurant servers, are assigned to tasks–such as filling take-out orders—where tips aren’t earned? Daniel L. Bennett and Victor V. Claar say that employers should fulfill their obligations to their employees by paying a higher wage:

Such contracts include responsibilities and expectations on both sides. Servers work for a low base wage, but they also expect to earn tips. Employers let servers earn tips, and employers pay the base wage. When employees are reassigned from duties that earn tips to ones that don’t, then the employer has altered the implicit agreement and would be wise to compensate employees accordingly.

Making such a modification to the agreement doesn’t have to be complicated. Servers could continue to receive their base plus tips when they are serving diners. And savvy employers will ignore this arrangement and pay a higher fixed hourly rate when workers are filling takeout orders and cannot earn tips.

In fact, Florida labor law already does this — albeit at a low rate. The minimum wage for tipped employees is $5.23, but they are guaranteed the state minimum wage of $8.25 even when their tips are low. In Yoder’s case, she should have been paid at least $8.25 an hour for the time she spent filling Christ Fellowship’s order, even though she might have earned more serving dine-in customers. Yoder’s frustration is understandable since her employer required her to do work that was less profitable for her.

Read more . . .

Enjoy the article?

Click below to view our latest and most popular posts!

Read More

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

Comments