Epg Presentation Tip Pooling And Server Banking.10.06.09
Because good counsel makes a world of difference
Tip Pooling, Server Banking,
Wage Laws and Litigation
Christopher T. Vrountas, Esq.
Nelson, Kinder, Mosseau & Saturley, P.C.
Employment Counseling and Litigation Group
Topics for Discussion
• What is “Tip Pooling”?
• What is “Server
• What do the Wage
Laws say about Tip
Pooling and Server
Tip Pooling is?
• What is “tip pooling”?
• Employees sharing their
tips earned to be
redistributed among their
• There are many different
kinds of “tip pools”
– Voluntary (management
– Required (management
– Sharing only with servers
– Sharing with non-servers
• The New Hampshire wage act
• Tips are wages and shall be the
property of the employee receiving the
tip and shall be retained by the
employee, unless the employee
voluntarily and without coercion agrees
to participate in a tip pool which is not
required and not controlled in any
manner by the employer.
• If the employee agrees to participate,
the employer is not precluded from
administering a valid tip pool in which
participation is voluntary, not coerced,
and the employer exercises no control
over the manner in which tips are
pooled other than for accounting and
• The Massachusetts Wage Act provides:
– No employer or person shall cause, require or
permit any wait staff employee, service
employee, or service bartender to participate
in a tip pool through which such employee
remits any wage, tip or service charge, or any
portion thereof, for distribution to any person
who is not a wait staff employee, service
employer or service bartender. Mass. Gen. L.
c. 149, section 152(c)
• No employer or agent shall collect, take or
receive any gratuity or a part thereof that is paid,
given to or left for an employee by a patron, or
deduct any amount of wages due an employee
on account of a gratuity, or require the employee
to credit the amount, of any part thereof, of a
gratuity against as a part of the wages due the
employee from the employer. Every gratuity is
hereby declared to be the sole property of the
employee or employees to whom it was paid,
given or left for. Cal. Labor Code, section 351.
Tip Pooling Cases
• Ruth’s Chris Steak
Tip Pooling/Take Away
• Voluntary—means voluntary
• Don’t control it or impose terms (beyond
• Document, document, document
– To show consent
– To keep accurate books
Server Banking is?
• Server brings in his or her own initial
amount of cash to fund a personal
bank during the work shift to make
change when requested by customers,
including when cashing out a customer
paying a bill for the meal served.
• Employer funds a bank by advancing a
cash amount to the server for him or
her to use for change making manage
until the end of the work shift when the
server must return the advance.
• Server commingles his or her cash tips
during a shift with the bank, either
funded or unfunded, and makes
change from the bank when asked by
customers, including when cashing out
a customer’s bill for a meal served.
Server Banking/NH Statute
RSA 275:48, provides in relevant part:
I. No employer may withhold or divert any
portion of an employee’s wages
(a) The employer is required or
empowered to do so by state or federal
law, including payroll taxes.
(b) The employer has a written
authorization by the employee for
deductions for a lawful purpose
accruing to the benefit of the employee
as provided in regulations issued by
Server Banking/NH Regulations
Lab 803.02(b) and (f) provide:
• (b) Pursuant to RSA 275:48 I, no
employer shall require an employee or
applicant for employment to pay for the
cost of a medical examination, non-
required drug or alcohol testing,
records required by the employer, or
any item required by and for the
benefit of the employer, as a condition
of employment. This shall not include
examinations, permits or licenses
required by state or federal law.
• (f) Pursuant to RSA 279:26-b and
RSA 275:48, no employer shall
withhold, divert, or make use of tips for
any purpose not specifically allowed by
RSA 275:48 I.
What is the effect of “making
• Where is the Deduction? Payment of a
cost? Withholding? Diversion? or use?
• What if it is not “from tips”?
• By the end of the shift, no money leaves
the server’s hands.
• No “time value” for the money.
The DOL’s Response
• Fund the bank (but
only once is
• Once funded,
• Don’t ask the server
to fund the bank
(even if not from
• Christopher T. Vrountas leads the Employment
Practice Group for Nelson, Kinder, Mosseau & Saturley,
P.C. Mr. Vrountas represents companies in matters
involving employment discrimination and wage claims,
covenants not to compete, whistleblower claims,
intellectual property matters, defamation claims, contract
claims and other business disputes. He has appeared
before various state and federal civil rights commissions
nationally and has tried employment and commercial
matters in both state and federal courts. He is a frequent
speaker on employment law issues.