Tipped and Taken Advantage Of? Know Your Rights as a Tipped Employee

Tipped employees are the backbone of the service industry, from bartenders and servers to valets, hotel staff, and delivery drivers. While tips can boost take-home pay, they also open the door to wage theft and unfair labor practices. Too often, employers in restaurants, bars, salons, and hospitality settings rely on workers not knowing their rights under federal and state wage laws.

If you're a tipped worker and suspect you're being underpaid, it’s important to know: you may be entitled to recover the wages you’re owed. Morgan & Morgan is here to help you understand your rights and fight back.

Who Qualifies as a Tipped Employee?

Under the Fair Labor Standards Act (FLSA), a "tipped employee" is defined as someone who regularly receives more than $30 per month in tips. Common examples include:

• Waiters and waitresses
• Bartenders
• Baristas
• Valets
• Bussers and runners
• Hotel housekeepers
• Delivery drivers
• Casino workers
• Nail technicians and spa workers

Tipped employees often earn a lower base wage, known as the “tipped minimum wage,” with the expectation that tips will bring their total earnings up to or above the standard minimum wage. But that’s not always how it plays out.

The Tipped Minimum Wage: Legal, But Often Abused

The federal tipped minimum wage is just $2.13 per hour—a figure that hasn’t changed since 1991. Employers are legally allowed to pay this lower wage if (and only if) an employee’s tips bring it up to the full federal minimum wage of $7.25/hour (or higher in states with better protections).

If tips fall short, employers are required to make up the difference. Failing to do so is wage theft, and it’s illegal.

Unfortunately, many employers don’t follow the rules. Some may even intentionally shortchange workers by:

Unfair Tip Pooling

Employers can require tips to be shared with other tipped employees (like bussers and hosts), but not with managers, cooks, or dishwashers. Your employer may owe you significant back pay if tips go to non-tipped staff.

Being Paid Tipped Wage for Non-Tipped Work

You shouldn’t be paid $2.13 an hour to scrub toilets, prep food in the kitchen, or unload delivery trucks. When your time is spent on non-tipped tasks more than 20% of the time, your employer may owe you full minimum wage for those hours.

Working Off the Clock

If you’re required to clock out and continue working, whether closing down the bar or cleaning the floor, that’s unpaid labor, and it’s illegal.

Illegal Deductions

Are you being charged for broken dishes, customer walkouts, or uniform costs? Employers cannot dip into your paycheck or tips to cover their own expenses.

Misclassification

Some employers wrongfully classify tipped workers as “independent contractors” to avoid paying minimum wage or overtime. If your schedule is controlled, you wear a uniform, and follow their rules, chances are you’re an employee, and you deserve legal protection.

Your Legal Rights as a Tipped Employee

As a tipped employee, you are entitled to:

• Minimum wage: Your tips and base wage must equal at least the federal or state minimum wage.
• Overtime pay: If you work more than 40 hours a week, you must be paid time-and-a-half, even as a tipped worker.
• Protection from retaliation: It’s illegal for an employer to fire, demote, or punish you for asserting your wage rights.
• Full access to your tips: Your tips are your property, not the employer’s.

And here’s the good news: if your rights were violated, you may be able to recover double the amount you’re owed under federal law, plus attorneys' fees and costs.

What to Do If You Think You’ve Been Underpaid

If you're unsure whether your employer is following the law, follow these steps:

• Track your hours and tips: Keep a personal record of when you work, how much you're paid, and what tasks you perform.
• Save all pay stubs or schedules: These can be crucial evidence if a claim is filed.
• Speak to coworkers: Wage violations often affect entire teams. You may not be alone.
• Consult an attorney: The sooner you get legal advice, the better your chances of recovering lost wages.

You Deserve Fair Pay for Honest Work

No one should have to worry about being underpaid, especially in physically and emotionally demanding jobs like restaurant or hospitality work. If you’re putting in long hours on your feet and going above and beyond for customers, you deserve to be paid fairly and legally.

Morgan & Morgan Fights for Tipped Workers

At Morgan & Morgan, we believe every worker deserves fair compensation, no matter where they work or how they’re paid. Our wage and hour attorneys have helped thousands of employees recover lost wages and hold dishonest employers accountable. If you believe your tips have been misused or your wages shortchanged, we’re ready to investigate your case and fight for what you’re owed.

We work on a contingency fee basis, which means there’s no cost to you unless we win. Let’s level the playing field. Contact us today for a free, confidential case evaluation.