Ask the Lawyer! Is There a Way We can Share Tips with Back-of-the-House Staff, Legally?

Question: Like a lot of restaurants, our management would like to share tips with back-of-the-house staff, so they feel they are appreciated by our guests for their hard work. Is there a way to do this legally?

You run a high-end restaurant in the city. Your patrons tip generously because the service is great and the food is outstanding. As a result, your wait staff is paid quite well and they enjoy competitive wages with other restaurants and hotels in town. On its face, all seems well but as any restaurant owner knows this type of success can lead to problems: What about the back of the house? Sure, your servers and other front-of-house workers reap the benefits of their hard work in the form of increased tips but the back of the house typically doesn't see a dime.

Objectively, this may seem fair for a couple of reasons. First, many restaurateurs take advantage of the "Tip Credit" to lessen the burden of minimum wage laws. The tip credit allows an employer to take a credit toward its minimum wage obligation for tipped employees, because there is an assumption that regularly and customarily tipped employees will make the vast majority of their money through tips from the patron. Thus, where an employer takes advantage of the tip credit, federal law only requires payment of $2.13 per hour to the tipped employee, and the employee makes up the difference of the minimum wage on the back end.

Because the amount of tips a server may receive on an average shift often far exceeds the minimum wage - especially in high-end establishments - the front of the house tends to make quite a bit more than the back of the house. Some owners attempted to even the playing field by allowing back-of-the-house employees to share in tip pools with the front.