My question is, what percentage of the tips a waitress receives from customers is the waitress legally entitled to retain as her own?

Federal laws state that all tips received by the employee are to be retained by the employee which led me to believe that a waitress who receives tips is legally entitled to retain all the tips she has been given. However, federal laws go on to state that nothing in this subsection shall be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.

The U.S. Department of Labor has sent me letters and emails explaining that this federal law permits an employer to require that a waitress contribute her tips to a pool that shares her tips among workers who customarily and regularly receive tips, such as busboys, bartenders, hostesses and other workers who provide service to the customer. The problem is, while they have explained that the waitress can be required to share part of her tips with other workers, they refuse to explain how much the waitress is legally entitle to retain as her own.

From the information they have sent me, apparently the law doesn’t mean that all tips received by a waitress are to be retained by the waitress. Instead, they seem to be suggesting that when federal laws state that all tips received by the employee are to be retained by the employee, what it actually means is that all tips received by the employees who served the customer in some way are to be retained by the employees who served the customer in some way.

According to the U.S. Department of Labor, busboys, bartenders and others who normally provide service to the customers are eligible to be included in a tip pool that shares the tips restaurant workers receive from customers. However, while the DOL has explained that certain types of employees are eligible to share in such a tip pool, they blatantly refuse to explain what percentage of the tips a waitress receives the waitress is eligible to retain from the pool. You would think that the waitress would be entitled to a bigger share than the busboy or the bartender since the tips were most likely handed to her via cash or via the bill.

To put it more simply, while the DOL has explained that, besides the waitress, other types of employees are entitled to a portion of the tips a waitress receives, they refuse to explain what percentage each types of employee is legally entitled to retain as their own.

If the DOL is going to hold an opinion which suggests that certain types of employees are entitled to a portion of the tips a waitress receives, then they should know what portion each is entitled to. Don’t you think so?

There opinion seems to suggest that when federal laws state that nothing in this subsection shall be construed to prohibit the pooling of tips among employees who customarily and reguarly receive tips, what it is stating is that all employees who customarily and regularly have receive tips from a tip pool in the past are entitled to a share of the tips a waitress receives. If this is the case, then where is the law that explains what portion each type of employee is entitled to?

It is my opinion that federal laws are not suggesting that certain types of employees are eligible to be included in a tip pool. To me, it should be up to the customer to decide who his tip belongs to. Instead, I believe the law is simply explaining that an employee who customarily and regularly receives tips, such as a waitress, cannot be prohibited from sharing any portion she chooses with any other workers she chooses to share her tips with.

To me, the waitress should be the one deciding who can share in her tips, NOT the U.S. Deparment of Labor. I don’t think customers are giving the U.S. Department of Labor tips so that they can decide who the customer’s tip belongs to.

Sorry for such a long post, but I have been trying to get this question answered for over 10 years.

In the case of a waiter, what percentage of the tips customers give him constitute “all tips received”?

This same law goes on to state that nothing in this subsection shall be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips. The Department of Labor is currently interpreting this part of the law as enumerated who is eligible to share in the tips waiter’s receive. According to the DOL, employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), busboys/girls and service bartenders are eligible to share in the tips given a waiter, and as such, a tip pool which distributes tips to all these workers cannot be prohibited.

If, as DOL suggests, federal laws are explaining that other types of workers are eligible for a share of the waiter’s tips, then what percentage is the waiter legally entitled to? What percentage of the tips a waiter receives would the waiter have a legal right to “retain all of”, as his own?

Likewise, since busboys have been classified by the DOL as a type of employee who is eligible to share in the tips a waiter receives. What percentage of the waiter’s tips constitues “all the tips” the busboys is legally entitled to retain as his own?

Now please explain what percentage the bartender is entitled to retain all of, as his own?

How about back of the house workers such as cooks and dishwashers? Some could say they to “serve customers”.

Can you explain why a bellhop would be entitled to a share of the tips waiters and other restaurant employees receive?

The reason I ask is,

If an employee has no idea of what constitutes “all the tips he has received”, then how can he retain all the tips he has received?

Isn’t the intent of section 203(m) to insure that an employee who receives tips retains all the tips?

The Department of Labor’s suggestion that section 203(m) is enumerating who is eligible to share in the tips a waiter receives is actually preventing employees who receives tips from retaining all the tips, due to the fact that the Department of Labor’s interpretation is silent on what percentage each type of employee is legally entitled to retain all of.

The Department of Labor’s current interpretation of section 203(m) is nullifying and contravening the intend of the law, due to the fact that an employee who receives tips cannot retain all his tips when the Department of Labor refuses to explain what percentage he is legally entitled to retain as his own.

For instance, a waiter cannot retain all his tips when the Department of labor is holding an opinion, which most courts agree with, that other types of employees are eligible for a share of the tips customers have chosen to give him. Likewise the busboy cannot retain all his tips due to the fact that both the Department of Labor and the courts refuse to define what portion of the wiater’s tips the busboy is authorized to retain as his own.

I believe the problem stems from the fact that section 203(m) is being incorrectly interpreted. While the law states that nothing in this subsection shall be construed to prohibit the pooling of tips among emplyees who customarily and regularly receive tips, I don’t believe that the law is attempting to suggest that other employees are eligle for a share of the tips an employee personally receives from customers. The preceding part of this law states that ALL tips received by the employee are to RETAINED by the employee. Which brings me to an ulterior interpretation that makes much more sense and doesn’t nullify and contravene the intent of the law.

The word “retain” is defined as to keep in one’s possession or to keep for one’s use. If the word retain were misconstrued, in section 203(m), as an employee must keep all tips he has received in his possession, many workers might errantly be lead to believe that the law prohibits them from sharing a portion of their tips with other workers. Workers in the service industry, for decades, have customarily and regularly shared a portion of their tips with co-workers who assist them in their duties.

Instead of interpreting section 203(m) as a law that is enumerating types of employees eligible to share in any tip given a worker, it makes much more sense that the law is simply explaining that the word “retain” should be interpreted as to keep for one’s use. This way employees won’t miscontrue section 203(m) and think that the law prohibits them from sharing a portion of their tips with other workers, as they have customarily and regularly done in the past.

What I believe the law is stating, is that all tips received by an employee are to be retained for the employee’s use.

CFR 531.52 has substantiated this interpretation by stating that when applying the provision of section 203(m) only tips received as money belonging to an employee which “he may use as he chooses”…..may be counted.

The U.S. Department of Labor must correct their errant opinion which is contravening the requirements of section 203(m). Their current opinions concerning tips and tip pools is preventing employees from actually retaining all the tips they have received.

If the law is properly interpreted, the waiter would know what tips he is entitled to retain as his own? And it makes sense. A waiter is entitled to retain all the tips customers present him. That’s the tips he has received. Likewise, a busboy is entitled to retain all the tips waiters share with him along with all the tips customers might present him directly. Likewise, a bartender, or for that matter, a bellhop and even a counter server would be entitled to retain all the tips waiters, or others, might share with them along with the tips customers present them directly, however, I don’t see a waiter sharing his tips with a bellhop.

With this interpretation, each and every employee is aware of what “all the tips he has received” actually means, and as such, section 203(m) will act to protect such employees.