What is Tip Skimming?
The unlawful practice of tip skimming, which is often overlooked, is a significant problem in the food service industry. Tip skimming refers to the unlawful practice of restaurant owners or managers taking a portion of tips that belong to the restaurant’s employees. Tip skipping normally coincides with tip-pooling, the practice of sharing tips between the staff, including servers, waiters, bartenders, chefs, and dishwasher. When tip-pooling is utilized, owners and managers can easily skim tips from the pool without employees’ knowledge. Some owners and managers also attempt to conceal their tip skimming in pay-stub deductions labeled “meal credits” or “admin fees”.
Victims of tip skimming are unlawfully underpaid, disenfranchised, and taken advantage of by management. Employees in the food industry work hard, long hours to provide for their family and deserve to be paid their duly earned wages and tips.
Federal and State Law
Wage and tip laws are governed by United Stated Department of Labor and the New Jersey Department of Labor and Workforce Development. The combination of federal and state wage laws make it illegal for a restaurant employer to share in tips, withheld wages and tips, skim tips, and pay employees under minimum wage.
Restaurant and food service employees are required to earn minimum wage as required by New Jersey state law, of $8.60 an hour. Employers may pay employees less than minimum wage as long as they make $8.60 after earning tips. If an employee doesn’t make enough tips during the hour to meet minimum wage, the employer must pay the difference.
While it can be hard for restaurant employees to spot tip skimming, being aware of the tell-tale warning signs can be your first line of defense:
- Earning below minimum wage ($8.60 per hour in New Jersey)
- Significant and unclear payroll deductions
- Unclear, confusing, or “fly-by-night” tipping procedure
- Tipping procedure that changes frequently
- Meal deductions that are greater than the cost of the food
McOmber & McOmber’s team of attorneys can review your unique situation and help determine if you are a victim of tip skimming.
Legal Remedies to Recover
If you are a tipped employee and believe your restaurant illegally tip-skimmed or withheld your earned wages, McOmber & McOmber can help you recover the earnings you deserve. Generally, you can sue your employer for unfair business practices, fraud, and misrepresentation. Furthermore, certain wage and tip violations can warrant criminal prosecution by the State of New Jersey.
After complaining of tip-skimming, you may be subject to retaliation or adverse employment actions.
Seeking Legal Counsel and Representation
If you believe that you are a victim of tip skimming, it is imperative to consult with an experienced and reputable employment litigation lawyer. Red Bank & Marlton wage and hour lawyers at McOmber & McOmber have been representing clients since 1974.