Tip Sharing the Subject of Several Lawsuits

Las Vegas, NVStarbucks is not the only company facing lawsuits regarding its tip sharing policy. In fact, a few companies face similar lawsuits related to their practice of sharing employee tips with supervisors. At the center of the issue is how employees and supervisors are classified and whether it is legal for employers to expect employees to share their tips with their supervisors.

One such lawsuit is currently being heard in Las Vegas. The plaintiffs, two casino dealers who filed the class action lawsuit, allege their employer, hotel-casino Wynn Las Vegas, illegally changed its tip pooling policy back in September 2006. The change in policy reclassified some supervisors, allowing them to share in the tip pool. According to the lawsuit, this violated an employment agreement that was drafted before Wynn Las Vegas opened. Prior to the change in policy, tips had been given only to dealers.

"Wynn Las Vegas has said that the new policy was announced because there was a huge gap between the dealers' and supervisors' wages. The company also said that the change, which saw "floor supervisors" reclassified as "team leaders" was meant to enhance customer service.

Meanwhile, a bartender at Fenway Park has filed a lawsuit against Aramark Corp., the company responsible for Fenway's concession stands, alleging the company takes some of the tips meant for employees.

Of course, the tip sharing lawsuit with the highest profile involves Starbucks. After a recent court ruling ordering Starbucks to pay $105 million for illegally allowing shift supervisors to share tips, more lawsuits have been filed against the company in different states. One such lawsuit was filed in New York, where over 2,000 baristas claim they are owed at least $5 million in shared tips. A similar lawsuit has also been filed against Starbucks in Minnesota.

Two waiters who allege they were forced to share their tips with restaurant management filed a tip sharing lawsuit last summer against Nobu. What makes their situation more outrageous is that restaurants in New York State are allowed to use a "tip credit" to supplement lower than minimum wage pay. This means that restaurants in the state can actually pay employees $4.35 an hour, less than federal and state minimum wage, if those employees receive enough in tips. However, employers are not allowed to share those tips among managers.

Imagine being told that you can only make $4.35 an hour because you receive tips, but then being told that you must share your tips with other employees, even if those other employees make more hourly than you do.

As more and more employees investigate their company's tipping policies, it is likely that the number of lawsuits against employers for their policies will grow. What some employees took to be standard practice, sharing tips with supervisors, may actually be a violation of the Labor Code, depending on what state the company operates in. In many states, it is illegal for employers to force employees to share their tips with management or supervisors.

If you believe your company is illegally forcing you to share your tips with management and other supervisors, contact a lawyer who can help determine your eligibility to join a class action lawsuit.