New Jersey, like other states, has a minimum wage. But it also recognizes that tipped employees are different from other employees. Wait staff and other restaurant workers who receive tips are governed by different rules and regulations that can affect a variety of issues, such as how much your employer must pay you to whether you need to pool your tips. If you have questions, you should meet with a New Jersey employment lawyer.
Minimum Wage
New Jersey’s minimum wage is currently $8.60 an hour. Tipped employees are entitled to earn at least this amount. Federal law requires that tipped employees make at least $2.13 an hour, guaranteed. The remainder can be in tips. States were free to set a higher minimum for tipped employees, but New Jersey has chosen to use the federal minimum.
What happens if you do not make at least $8.60 an hour once all your tips have been counted? In this situation, your employer needs to make up the difference.
For example, you might have worked for 8 hours. To comply with the minimum wage, you must make $68.80 for the entire 8 hours. If you only made $50 in tips for those 8 hours, then you will take home your $50 in tips and $17.04 in employer pay ($2.13 an hour times 8). This puts you behind the minimum wage, so your employer needs to make up the difference.
Tip Pooling
Generally, New Jersey recognizes that tips belong to the employee. An employer cannot claim the tips as their own and only give workers a portion of the tip.
Nevertheless, some employer use tip pools to make take away some of the unfairness that can arise with tips. For example, one server might get a massive tip—Say $100 on a $20 bill—whereas the other servers on the shift struggle to get tips through no fault of their own. With a tip pool, servers pool their tips and then distribute them at the end of the shift or day.
New Jersey law allows employers to use tip pools. However, New Jersey Administrative Code § 12:56-8.4 sets certain requirements that an employer must follow before setting up the pool. For example, there must be an agreement beforehand with the employees.
If an employer decides to pool tips and distribute them, he still needs to follow wage and hour laws. Tip pooling cannot be used as a way to deprive an employee of the minimum wage. You should calculate how much you make an hour every day to make sure that you are earning at least the minimum wage.
Contact a New Jersey Wage & Hour Dispute Lawyer
The state’s laws on tipped employees are complex, and many employees are unaware of their rights. Many employers might even be confused about what they can and cannot do.
However, the complexity of the law is no reason to violate an employee’s rights to their tips. If you suspect you are not being paid what you should, then please contact a wage and hour attorney in New Jersey. You might be entitled to backpay, as well as other relief.
Contact the Sattiraju & Tharney, LLP right away by calling 609-216-7817 or sending an online message. We can discuss your options with you.
FAQs About Unpaid Tips in New Jersey
Who legally owns a customer tip under New Jersey wage and hour law?
According to the New Jersey Wage and Hour Law, all tips left by a customer belong exclusively to the employee who earned them. While New Jersey companies can process card transitions or administer valid pooling arrangements, managers and business owners are strictly banned from keeping any portion of these funds.
What are the explicit restrictions for mandatory tip pools in New Jersey establishments?
To operate a legal tip pool in New Jersey, the system must exclude all personnel who act with managerial authority, such as supervisors, shift leads with hiring power, or owners. Including non-tipped management or back-of-house staff who do not customarily interact with guests violates New Jersey labor guidelines unless specific credit conditions are met.
How does the New Jersey tip credit system safeguard a service worker’s baseline minimum wage?
New Jersey permits businesses to pay tipped workers a lower cash wage and utilize a “tip credit” to reach the state minimum wage threshold. However, if an employee’s hourly tips combined with their cash wage fall below the mandatory New Jersey minimum wage during a pay period, the employer is legally required to make up the difference out of pocket.