Your tip pool took money from your pay

Servers may see a tip-out on the checkout slip but never see who received it. Bartenders may watch a manager take from the jar. Dancers may have to pay “the house” before leaving. Your tip pool and cash wage have to be tested together, because the rules change when an employer counts tips toward its wage duty. We review both the pay record and the path the tips took.

The tip wage does not erase minimum wage

The Fair Labor Standards Act permits a covered employer to take a tip credit only if the worker receives the required cash wage, is told about the credit, and actually keeps enough tips to cover the difference. The employer must make up a shortfall in any workweek. See 29 U.S.C. § 203(m)(2)(A) and 29 C.F.R. § 531.59. It may not use tips it never paid to the worker. Georgia follows the federal tipped cash-wage figure; Rhode Island and Connecticut set higher state floors.

“They pay me the tip wage.” The reduced cash wage is one part of the calculation. We compare the cash paid, the tips the worker kept, and the hours worked. A pay stub that shows the cash wage but leaves out card tips or required tip-outs cannot answer whether the employer met the full wage duty. The federal figures are below; the Georgia, Rhode Island, and Connecticut pages give the state figures.

Who is in my tip pool?

“They never told me the split.” An employer taking a federal tip credit must give notice of the tip-credit terms, including that tips stay with the worker except for a valid pool. We ask for the written policy and compare it with the checkout reports. If the policy says one thing and the money went elsewhere, the records matter more than the label on the slip.

“The kitchen gets part of my tips.” Federal law permits a mandatory pool with cooks or dishwashers if the employer pays every participating worker the full federal minimum wage in cash and takes no tip credit. If the employer takes a tip credit, a mandatory pool is limited to employees who customarily receive tips. A kitchen share is therefore a reason to check the cash wage, not proof by itself that the pool is illegal. State law may impose additional rules, especially in Connecticut, where we have not yet cleared a complete state tip-pool summary for publication.

“The manager takes a cut.” This rule is simpler. Employers, managers, and supervisors may not keep any part of employees’ tips, whether or not the employer takes a tip credit. See 29 U.S.C. § 203(m)(2)(B) and 29 C.F.R. § 531.52. A manager may keep a tip from a customer for service the manager alone provided, but cannot take a share from a pool fed by other workers’ tips. We identify the recipient and trace the checkout entry to the payment.

“They call it a service charge.” A compulsory service charge is not a customer tip under federal law. Whether it was paid out as wages, retained by the business, or described to customers as a tip changes the analysis. We compare the menu or receipt with payroll and card records before treating the line item as a tip that belongs in a pool.

Why does side work matter?

A server may roll silverware, clean the dining room, or stock a station. Some of that work belongs to the tipped occupation; some may be a separate job. Under the current federal dual-jobs regulation, an employer cannot use a tip credit for hours spent in a separate non-tipped occupation. See 29 C.F.R. § 531.56(e). The former federal percentage and continuous-time limits were vacated in 2024, so a claim cannot rest on those limits alone. We look at the duties and time records instead.

A bartender who spends a shift doing only untipped maintenance presents a different record from a bartender who wipes the bar between customers. We ask what work was required, when it happened, and how the employer recorded it. A closing checklist, schedule, or message can establish work that the time clock missed. Unpaid off-the-clock work also raises a separate minimum-wage or overtime question.

What we do with the pay record

We sort workers by job, obtain pay stubs and tip reports, trace the pool’s recipients, and compare the records with federal and state wage rules. If the evidence supports a claim, we explain the amount the records support and the steps to pursue it. A successful Fair Labor Standards Act claim makes the employer pay a reasonable attorney’s fee under 29 U.S.C. § 216(b). Fighting a valid claim can raise its own bill.

The filing period depends on the claim and state; use the applicable state wage table as a starting point. A consultation is free. We will explain fees and costs after the required Rhode Island and Connecticut disclosure terms are confirmed. For club-specific charges, read our dancer wage page; for other pay practices, use the wage-theft overview.

Send us a pay stub, checkout report, and the tip-pool policy so we can trace where your tips went.