Is it legal for my employer to take 50% of my gratuity?

I work in the catering business for a medium sized company. We charge customer labor as a line item on their invoice and also an automatic gratuity. We charge $40 per hour for each server and I only make $15 per hour. They are obviously making money on our hour and the food. Is it legal for them to take our tips as well? The client thinks that we are getting taken care of and are receiving the gratuity listed on their bill. Wouldn’t this be like a server working in a restaurant having to give half of all their tips to the house? I don’t feel like it’s fair. In MN.

Asked on December 22, 2010 under Employment Labor Law, Minnesota


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Labor laws involving gratuities (tips) differ from state to state and can include the ability of restaurant owners requiring the sharing of tips among all staff (not just the wait staff).  In Minnesota, you need to check your company's policy on tips and pooling.  If a pooling agreement is not in place, then you get to keep your tips but understand you should check with your employer's handbook first, and then check with your state's labor dept. Regardless, you don't have to share (and management is actually I believe legally prohibited from sharing) your tips. You need to move on this now so a proper accounting can be done and each employee can be paid the tips he or she is entitled to get absent this contract line item.

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