(a) A tip is a sum presented by a customer as a gift or gratuity in recognition of some service performed for the customer. It is to be distinguished from payment of a charge, if any, made for the service. Whether a tip is to be given, and its amount, are matters determined solely by the customer. An employer that takes a tip credit against its minimum wage obligations is prohibited from using an employee's tips for any reason other than that which is statutorily permitted in section 3(m)(2)(A): As a credit against its minimum wage obligations to the employee, or in furtherance of a tip pool limited to employees who customarily and regularly receive tips. Only tips actually received by an employee as money belonging to the employee may be counted in determining whether the person is a “tipped employee” within the meaning of the Act and in applying the provisions of section 3(m)(2)(A) which govern wage credits for tips.
(b) Section 3(m)(2)(B) of the Act provides that an employer may not keep tips received by its employees for any purposes, regardless of whether the employer takes a tip credit.
(1) An employer may exert control over an employee's tips only to distribute tips to the employee who received them, require employees to share tips with other employees in compliance with § 531.54, or, where the employer facilitates tip pooling by collecting and redistributing employees' tips, distribute tips to employees in a tip pool in compliance with § 531.54.
(2) An employer may not allow managers and supervisors to keep any portion of an employee's tips, regardless of whether the employer takes a tip credit. A manager or supervisor may keep tips that he or she receives directly from customers based on the service that he or she directly and solely provides. For purposes of section 3(m)(2)(B), the term “manager” or “supervisor” shall mean any employee whose duties match those of an executive employee as described in § 541.100(a)(2) through (4) or § 541.101 of this chapter.
[85 FR 86789, Dec. 30, 2020, as amended at 86 FR 52986, Sept. 24, 2021]
Notes of Decisions
Steele v. Leasing Enter., Ltd., 826 F.3d 237 (5th Cir. 2016).
· cites it 4× “§ 203 (m) and 29 C.F.R. §§ 531.52 , 531.59. However, when customers paid and tipped with a credit card, Perry’s retained 3.”
Montano v. Montrose Restaurant Assocs., Inc., 800 F.3d 186 (5th Cir. 2015).
· cites it 6× “A “tip” within the meaning of the FLSA is defined as “a sum presented by a customer as a gift or gratuity in recognition of some service performed for him. . . . Whether a tip is to be given, and its amount, are matters determined solely by the customer, who has the right to…”
Wai Tom v. Hosp. Ventures LLC, 980 F.3d 1027 (4th Cir. 2020).
· cites it 2× “29 C.F.R. § 531.52 (emphasis added). In addition, that same regulation provides that tips can satisfy the FLSA’s minimum-wage requirement by use of the tip credit in 29 U.”
Melissa Compere v. Nusret Miami, LLC, 28 F.4th 1180 (11th Cir. 2022).
· cites it 8× “” Citing the definition of a tip set forth in 29 C.F.R. § 531.52 , 6 the district court noted that Nusret’s service charge was not paid directly to the Employees, nor did customers have a right to direct who would receive the service charge.”
Winans v. W.A.S., Inc., 758 P.2d 503 (Wash. Ct. App. 1988).
· cites it 22× “29 C.F.R. §§ 531.52 , .55(a). Immediately after the 1974 amendment the Wage and Hour Division of the Department of Labor, which promulgated the regulations and is charged with enforcement of the FLSA, issued several opinion letters asserting that the 1974 amendment superseded…”
Edwards v. Prime, Inc., 602 F.3d 1276 (11th Cir. 2010).
“Even though Prime and Oswald should not interfere with tips that patrons give to employees of the restaurant, see 29 C.F.R. § 531.52 (2009) (requiring a customer’s tipping of a server to be “free of any control by the employer”), they still exercise control over the…”
Mohammad Jahir v. Ryman Hosp. Props., 795 F.3d 442 (4th Cir. 2015).
· cites it 2× “” 29 C.F.R. § 531.52 . After an extensive canvass of § 203(m)’s text and legislative 19 history, see Updating Regulations Issued Under the Fair Labor Standards Act, 76 Fed.”
Hart v. Rick's Cabaret Int'l Inc., 967 F. Supp. 2d 901 (S.D.N.Y. 2013).
“” 29 C.F.R. § 531.52 . By contrast, a “service charge” is a “compulsory charge for service .”
Alec Marsh v. J. Alexander's LLC, 905 F.3d 610 (9th Cir. 2018).
“By crediting a server’s tips towards their obligations to pay full minimum wage for time employees spend working in a non-tipped occupation, employers deprive servers the full value of their tips, which are the property of the employee, see 29 C.F.R. § 531.52 , and make it…”
Pellon v. Bus. Representation Int'l, Inc., 528 F. Supp. 2d 1306 (S.D. Fla. 2007).
· cites it 2× “29 C.F.R. § 531.52 . The two dollar fee in this case is not gratuitous, discretionary for the customer, or kept and used by the recipient.”
Trinidad v. Pret A Manger (USA) Ltd., 962 F. Supp. 2d 545 (S.D.N.Y. 2013).
“29 C.F.R. § 531.52 . Plaintiffs are correct that, under this regulation, the practice in which tips are shared with employees who do not “customarily and regularly” receive tips is unlawful, even if the employee’s non-tip wages meet or exceed the minimum wages.”
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