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Is tip-sharing legal in Tennessee?

On Behalf of | Feb 23, 2020 | Employment Law

You work at a restaurant where you only earn $2.13 per hour. The rest comes from tips. If you don’t get enough, they have to increase your earnings to at least minimum wage, but you generally get more in tips than if you just had a higher wage without the tips.

Then your boss tells you about a new system they’ll be using for tips. Maybe it’s a tip-sharing program, where you all share your tips with cooks, busboys and other workers who may not get them directly from the customers. Maybe it’s a tip pooling system where all of the tips go into a general pool during the night and then, regardless of who actually got the tips, the total gets split evenly among all of the staff members.

Either way, your first question is whether or not that is legal. It’s not in every state, but it is in Tennessee. As long as employees are informed of it, employers can use tip pooling or tip sharing.

It may not always feel fair. Say you make $400 in tips and a fellow server makes just $100. With tip pooling, you both split the $500 total and take home $250. You feel like you lost money because that other worker did not earn as much as you and took some of your tips. That’s often why these systems are controversial.

Controversial or not, though, these types of things do happen. It’s very important to know all of your rights as an employee, especially if you think your employer may have violated them.