New Legislation Aimed at Ending Employer “Tip Theft”

David Witowski of Rubin Thomlinson LLP has a good post on this problem and the proposed solution.  His “key takeaways and best practices”?

  • “Ensure the distribution formula is in writing, clear and based on factors correlated to job performance;
  • “Inform all employees of the distribution formula;
  • “Pay redistributed tips and gratuities to employees in a timely manner;
  • “Ensure only those prescribed by the ESA share in the redistribution (i.e. not employers, directors or shareholders unless they regularly perform to a substantial degree the same work performed by some or all of the employees who share in the redistribution or employees of other employers in the same industry who commonly receive or share tips or gratuities); and
  • “Do not deduct credit card transaction fees from the pool of tips or gratuities.”

Please read the whole thing here.

Mr. Witowski’s “Employers’ Alert” PDF for printing and posting here.


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