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Tipped Workers' Rights

If you earn tips, there are special rules that apply to make sure you’re treated fairly. We help tipped employees understand their rights and get paid everything they’re entitled to.

How Tipped Employees Are Paid 

In most states, employers can count tips towards minimum wage. But your employer can’t pay you nothing and claim you work for tips only. The federal tipped minimum wage is $2.13, though it’s higher in 28 states and Washington, D.C.

If you work in a state that allows subminimum wage, your total pay—including tips and wages paid by your employer—must equal at least the full minimum wage. If you don’t make enough in tips to put you over the line, your employer is required to make up the difference.

In seven states, there is no tipped minimum wage at all. If you work in Alaska, California, Minnesota, Montana, Nevada, Oregon, or Washington, your minimum wage must match that of non-tipped employees.

Side Work and Non-Tipped Duties 

If you work as a server, you might spend part of your shift doing work that doesn’t generate tips, like cleaning, stocking, or prepping food. Your employer may pay you the tipped minimum wage for the whole shift, including the portions when you aren’t making tips. 

But some states have strict rules for ensuring that you don’t get paid a low tipped minimum wage when you spend your time on untipped work. In New York, New Jersey, Pennsylvania, and Connecticut, for example, if you spend more than 20% of your time on untipped tasks, you have to be paid at least the full minimum wage. In California and the six other states that don’t allow subminimum pay for tipped employees, the rule is simple: you must be paid the full minimum wage, whether or not you’re earning tips. 

Who is a Tipped Employee 

Common examples of tipped employees include:

  • Baristas
  • Bartenders
  • Delivery drivers
  • Waitstaff (servers, waiters, waitresses)

Tip Pooling 

Tip pooling happens when a business collects and redistributes tips earned by employees during a shift. The rules about who can participate in a tip pool are strict. 

Managers and supervisors aren’t allowed to take a share. Employees who don’t traditionally get paid in tips, such as cooks and dishwashers, also aren’t allowed to be part of a tip pool. 

We’re Here to Help 

If you earn tips and you think you aren’t getting paid right, we can help you figure it out. 

Framing the Issue

  • Tipped workers earn less and face higher poverty rates than the rest of the workforce. When you have to rely on someone else’s generosity for your income, you deserve strong legal protections—not just hope for a good shift.
  • Strict rules govern tipped workers’ pay. Employers often mishandle one requiring advance explanation of how tips affect your wages. Whether careless or intentional, the mistake causes lost wages and broken trust. 
  • Tipped workers include many women, people of color, immigrants, and single parents. These groups are highly vulnerable to wage theft as employers exploit power imbalances and economic insecurity.
  • Paying you the tipped minimum wage when you’re doing non-tipped tasks like cleaning or prepping is wage theft. Subminimum wage is only allowed when you’re actually doing tipped work, like waiting on customers.
  • The law is clear: Your tips are yours. Even if there’s a tip pool, supervisors, managers, and business owners can’t take a cut. 

Notable Matters

  • Won a $19.1 million settlement for TGI Friday’s and Carlson Restaurants workers in a class action alleging the company failed to pay overtime and off-the-clock work by recording fewer hours than employees actually worked, illegally paid workers a tipped minimum wage in violation of the strict rules for doing so, and misappropriated tips by retaining and requiring them to share tips with back-of-house staff.  
  • Obtained a $7.5 million settlement for tipped workers of a major New York City restaurant chain, alleging improperly paid tipped minimum wage, and forced employees to share tips with managers.  
  • Secured $3.9 million for servers and bartenders of Buffalo Wild Wings, who were allegedly required to perform non-tipped work while receiving a reduced minimum wage.   
  • Recovered $400,000 for workers of a major catering and event provider, who had their tips stolen by their employer. 

Questions about your legal rights as a tipped employee? 

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Have you been told you work for tips only?

If you think your legal rights may have been violated, or you suspect your employer is improperly paying other tipped workers, reach out to us. Our client intake team is available Monday to Friday, 8:30am to 7pm EST.

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