An electronic tip jar is much preferred over this old-fashioned kind, says Joel O’Malley of Nilan Johnson Lewis, an expert on the subject.
As the tipping issue at restaurants rages on between front of the house employees and back, Joel O’Malley of Nilan Johnson Lewis in Minneapolis offers a quick refresher course on a complicated topic that’s been tripping up the likes of Starbucks, Outback Steakhouse and Pinstripes in Minnesota with lawsuits of late.
Federal law was changed last spring, he notes, “to being quite employer-friendly, in that it allowed tips to be shared with back of house employees as long as they were being paid the federal minimum wage. If they aren’t being paid the minimum wage they can’t pool it.”
But, “some states are more particular,” he notes, and in those states employers have to follow state laws: California, New York and Minnesota are the prime examples. “They each are different in their own unique ways, which means that even if you wanted to take an approach, if you’ve got a national franchise, that would comply with the most restrictive state law, that doesn’t work because they are restrictive in different ways.”
For example, California and New York both forbid tips to be shared with back of the house employees, whereas federal law allows it. California and federal law also differ on the definition of supervisor, and who might be able to share in the pool.
O’Malley offered some top do’s and don’ts, but know the issue is enormously complicated so consult your attorney and stay up to date.