4/20/2023 0 Comments Busboy minimum wageThe Hospitality Industry Wage Order also sets forth a schedule of permissible “tip credits.” A “tip credit” is the amount of tips earned by an employee that the law allows an employer to take as a credit against the minimum wage requirement. These regulations also provide employees with a new mechanism by which to bring an action against employers who violate tip pool regulations. In 2011, the New York State Department of Labor introduced the Hospitality Industry Wage Order, bringing greater clarity to the language of NYLL § 196-d. However, the last sentence of this statutory provision permits tip pooling in situations involving “similar employee,” such as “a waiter with a busboy.” Id. NYLL § 196-d prohibits employers from partaking in tip pools: “No employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee.” Id. New York law defines tip pooling as “the practice by which the tip earnings of directly tipped employees are intermingled in a common pool and then redistributed among directly and indirectly tipped employees.” 12 NYCRR § 146-2.14 (b). ![]() Accordingly, service-industry employees should be aware of their rights and available remedies related to tip pools under the Fair Labor Standards Act of 1938 (“FLSA”) and the New York Labor Law (“NYLL”). Specifically, employers may sometimes participate in or deduct earnings from tip pools in unlawful attempts to avoid paying their employees the minimum wage or portions of their employees’ earned tips. However, employer-mandated tip pooling poses certain dangers for employees. Employers often use tip pools as a means of redistributing gratuities to service employees who might not otherwise receive the benefit of a tip, such as a busboy or host in a restaurant. ![]() Employees’ participation in tip pools can either be voluntary or mandatory. The term “tip pool” refers to a common fund of gratuities among employees who perform customer services.
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