If you are an employer in Texas, remaining in compliance with pertinent wage and hour laws is essential. This is especially true if your business employs tipped workers, who are subject to a separate set of rules in terms of how they should be compensated. Employers can easily run afoul of regulations without the right knowledge, which will quickly lead to legal trouble for you and your business.
The Texas Workforce Commission provides employers like you the basics on wage and hour laws for tipped workers. First and foremost, you should understand what constitutes a tip according to the law. Tips are provided at the volition of the customer, and can be cash, check or via credit card. It’s also important to know what is not considered a tip. Anything that is counted within your gross returns (such as mandatory services charges) should not be construed as tips.
All tips are the property of the worker who received them. This is true even when tip pooling occurs, which is when tips are shared among the staff. The staff must come to an agreement on how tips are divvied up, and employers are not permitted to keep employee tips and use them for other purposes. You can utilize a wage credit in some cases, but only if the employee in question receives an excess of $30 in tips on a monthly basis.
How frequently a worker receives tips is also important to consider. The key term here is “regularly”; workers must receive tips on more than an occasional basis to be considered tipped employees. This is usually true of specific professions, such as waiters, cab drivers, beauticians and many others.