Illegal Tip Practices

Tip Theft Is Wage Theft--We Hold Employers Accountable

Tipped workers are entitled to strong legal protections under both federal and Pennsylvania wage laws. Unfortunately, employers often break these laws by mishandling tips, making unlawful deductions, or misusing the tip credit. These violations can cause workers to be paid less than minimum wage and result in significant financial harm.

We represent tipped employees across industries like restaurants, bars, salons, hospitality, and delivery. Our firm helps workers recover unpaid wages caused by illegal tip sharing, underpayment of base wages, and other violations of the Fair Labor Standards Act (FLSA) and Pennsylvania Minimum Wage Act (PMWA).

FLSA Tip Credit Requirements

Under the FLSA, employers may take a “tip credit” and pay tipped workers as little as $2.13 per hour, so long as:

The employee regularly earns more than $30 per month in tips.
The employer provides proper notice of the tip credit.
The employee’s tips actually raise the employee’s total pay to at least $7.25 per hour.
Tips are not shared with managers or non-tipped staff.

If any of these conditions are not met, the employer must pay the employee the full minimum wage without using the tip credit.

The PMWA Provides Stronger Protections

Pennsylvania law gives tipped workers greater rights than the FLSA:

Higher tipped minimum wage: Pennsylvania employers must pay at least $2.83 per hour to tipped employees.
Higher tip threshold: Workers must receive at least $135 per month in tips to be classified as a tipped employee under Pennsylvania law.
Recognition of the 80/20 rule: The PMWA still recognizes and enforces the 80/20 rule, requiring full minimum wage pay if a tipped employee spends more than 20% of his or her weekly time on non-tipped duties (like prep work, cleaning, or restocking).
Mandatory tip pool restrictions: Tips can only be shared with other customarily tipped employees. Back-of-house workers (e.g., cooks or dishwashers) and supervisors cannot share in tips.

Even though the U.S. Department of Labor rescinded the 80/20 rule under the FLSA, Pennsylvania continues to protect tipped workers from being exploited through excessive non-tipped labor.

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What You May Be Entitled To

If your employer has violated federal or Pennsylvania tip laws, you may be eligible to recover:

You may also be able to pursue or join a class or collective action lawsuit if others were affected by the same policies.

Common Illegal Tip Practices

Forcing tip sharing with non-tipped employees.
Managers or supervisors taking any portion of tips.
Failing to give written notice before using a tip credit.
Paying below the applicable tipped minimum wage ($2.83 per hour in Pennsylvania).
Not paying full minimum wage when tips do not result in an employee earning at least $7.25 per hour.
Requiring tipped workers to frequently perform non-tipped work.

We Stand Up for Tipped Workers

Whether you work in a restaurant, salon, hotel, or other tipped service job, your employer has strict legal obligations. We’re here to make sure your employer follows the law—and to help you recover every dollar you’ve earned.

If you believe your tips were mishandled or your wages were illegally reduced, contact us today. We exclusively represent employees and are committed to protecting your rights.

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