Is Your Employer Shortchanging Your Tips? Fighting Wage Theft for Tipped Workers in NYC

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Wage theft is an unfortunate reality faced by many workers in the service industry, and tipped employees are particularly vulnerable to this exploitation. One study estimates that American workers lose $50 billion every year because of wage theft. Even skimming just a half hour off your paycheck each week could cost you thousands of dollars.

If you’re a tipped worker in New York City, you might be wondering whether your employer is playing fair when it comes to your hard-earned tips. You have rights and you deserve to take home a proper wage that accurately reflects your work.

The first step to preventing wage theft and recovering your unpaid wages is to understand what rights you have as a tipped employee, such as New York City’s required minimum wage, local tip pooling rules, and other protections you may not even know you have.

What Does Wage Theft Look Like for Tipped Employees?

Wage left can take various forms for tipped employees, so be on the lookout for:

  • Incomplete or No Tip Records – If your employer fails to accurately record your tips or neglects to keep any records at all, you may be underpaid for the tips you’ve earned.
  • Minimum Wage Violations – Your employer is legally required to make sure that your tips add up to at least the minimum wage in NYC when combined with your hourly wage.
  • Tip Pooling Abuse – While tip pooling is allowed under certain conditions in New York City, employers or managers may unlawfully give out tips to non-tipped employees or even illegally keep a portion of the tip pool for themselves.
  • Improper Deductions – Some employers may deduct fees for credit card processing, uniform costs, or other expenses from your tips, which could be illegal.
  • Off-the-Clock Work – If you’re being asked to perform non-tipped duties such as cleaning or prep work, you must receive the proper minimum wage for these tasks.

Tip theft is likely to have a profound impact on your ability to support yourself and pay your bills. This type of worker exploitation is illegal, unjust, and unfair. If you’re experiencing wage theft, you might not be the only one – your coworkers may also be in the same boat.

New York City Tip Laws

Fortunately, New York City has specific labor laws in place to protect tipped employees from this type of illegal misconduct by managers and employers. In addition, if you decide to file a wage theft claim, you are legally protected against retaliation by your employer.

That means it’s illegal for your manager or employer to demote you, change your shifts, or fire you because you took steps to protect your legal rights.

What Is the Minimum Wage for Tipped Employees in NYC?

The minimum wage for tipped employees in New York City varies based on factors like your industry, location, the size of your employer, and whether your employer takes a tip credit.

  • Locality – The five boroughs of New York City including Manhattan, Brooklyn, the Bronx, Queens, and Staten Island are on a different minimum wage rate compared to Long Island, Westchester, and the remainder of workers in New York state.
  • Company Size – The minimum wage may change based on whether you work for a small employer (up to 10 employees) or a big employer (11 or more employees).
  • Employer Tip Credit – New York state law allows employers to count a proportion of your tips towards your minimum wage rate as a “tip credit.” This credit works as if your employer had paid you those wages directly instead of as tips. The amount of tip credit they can take depends on the industry, such as hospitality versus restaurants. You must be given notice in advance of a tip credit for it to be legitimate.
  • Your Industry or Position – You may be subject to a different minimum wage depending on whether you’re a hospitality or service employee or a food service worker.

Minimum wage laws change often, sometimes yearly. It’s your employer’s responsibility to stay up to date with adjustments to the minimum wage and raise your hourly rate when required.

Is Tip Pooling Legal in New York City?

Yes. Like many other states, New York allows tip pooling under specific conditions. In a legitimate tip pool arrangement, employees who are eligible for tips share their personal tips with other eligible staff, such as bussers, runners, bartenders, and hosts.

In New York City, your employer may legally require you to participate in a tipping pool if your position involves tips. But in order for the tipping pool to be legal, there must be:

  • No Management Involvement – Managers and supervisors are not legally allowed to participate in tip pools, especially if have authority or control over subordinates.
  • Clear Distribution – Tips must be distributed fairly among eligible employees based on their level of service and hours. If your employer requires tip sharing, they can set the percentage. Employees can set the amount if they form a tip share on their own.

Most importantly, each employee must take home at least the full minimum wage, even if your employer has a tip credit or you participate in a tipping pool.

Can Kitchen Staff Get Tips in New York City?

Generally, kitchen staff such as cooks, chefs, dishwashers, and porters do not receive tips because they don’t interact directly with customers. Instead, they’re usually paid on an hourly basis based on certain minimum wage requirements for hourly employees.

Can Your Boss or Manager Take Some of Your Tips in NYC?

No. Your direct supervisor cannot participate in tipping pools or take any employee tips. Similar to back-of-house workers, managers and supervisors should be paid as hourly employees. If you suspect your supervisor is sharing your tips, that could be a form of wage theft.

What to Do About Tip Theft in New York City

If you suspect that your manager or employer is mishandling your tips, you can take action to protect your rights and get back your unpaid wages. Start by documenting any instances of wage theft, including incomplete tip records, inadequate minimum wage payments, or tip pooling abuse. Then reach out to an employment lawyer about your situation.

At Mirza Law, we can guide you through the complexities of New York’s labor laws with personalized guidance. We’ll help assess the strength of your claims and explain your legal rights and options. Contact us now to get started on your case.