Tip Pooling Pay Practicies’ Legality under Tenessee’s New Minimum Wage Rate
Tennessee wage workers’ received what will likely be their final minimum wage increase for a while when the federal minimum wage (including tipped employees’) increased last month to $7.25. Tennessee, having no minimum wage statutes of its own, followed this last of three annual minimum wage increases begun in 2006.
Unfortunately, if history be any indicator, tipped Tennessee employees, such as wait staff and other hospitality workers receiving $30 or more a month in tips, may not see the benefit of this increase, and may end up taking home less than the minimum wage of even three years ago, due to a practice known as tip pooling.
Tip pooling is not in-itself an illegal practice. Though the federal Fair Labor Standards Act (FLSA) states that a tip is the exclusive property of the employee receiving the gratuity, judges have decided, through a series of convoluted court decisions, that tip pooling (requiring tipped employees to pool a portion of their tips together to pay other employees) is legal–as a general practice. What gets many Tennessee service industry proprietors in trouble is when tip pools are used to pay-off underpaid un-tipped employees at the tipped employee’s expense.
If you earn $2.13 as a tipped employee in Tennessee, it is your employer’s duty to make up the difference and ensure that your take-home after tips is at least minimum wage of $7.25 per hour. If your employer has dipped into the tip pool to pay themselves or make gifts to managers or if your Tennessee employer has required you to pay out more than 15% of your tips (especially if your take home becomes lower than TN minimum wage), you may be able to recover to unpaid wages going back three years and have court and attorney costs covered through a wage pooling lawsuits.
To pursue underpaid or unpaid wages from overtime, withheld tips, or other illegal pay practices, contact the Nashville, TN wage and hour attorneys of Higgins Firm. We have to the experience to settle fast and fair Tennessee wage cases throughout the state.
Author Bio
Jim Higgins, founder of the Higgins Firm, is a seasoned personal injury attorney with deep roots in Nashville, Tennessee. A 4th generation Nashvillian, Jim carries on the legal legacy of his father, a judge for over 30 years. After graduating from the University of Memphis School of Law, Jim’s career began on the other side of the courtroom, defending insurance companies and learning their tactics for minimizing settlements. However, he soon realized his true calling was fighting for the rights of the injured, and for the past several years, he has exclusively represented plaintiffs in personal injury cases.
Since then, his dedication and skill have earned him membership in the prestigious Million Dollar Advocates Forum, an organization limited to attorneys who have secured million and multi-million dollar verdicts and settlements for their clients. Licensed to practice in Tennessee, Kentucky, and Georgia, Jim focuses on personal injury, product liability, medical malpractice, and workers’ compensation cases. His exceptional work has been recognized by his peers, earning him a spot on the Super Lawyers list from 2021 to 2024, a distinction awarded to only a select group of accomplished attorneys in each state.
