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Pooling tips? Only certain employees can join in

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in Compensation and Benefits,Human Resources

If your employees receive tips, be aware that only certain types of employees can participate in tip-pooling programs.

In such systems, employees are paid below the minimum wage on the assumption that the tipped income will push their hourly wage above the minimum. But a recent lawsuit against the Luby’s Restaurant chain in Texas forced the company to pay $366,864 in back wages to 1,680 current and former employees who were improperly paid due to the company’s tip-pooling policy.

Tip pooling is limited to employees who customarily and regularly receive more than $30 a month in tips. Luby’s cashiers and checkers participated in the tip-pooling system, which, the feds said, violated federal law.

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