Should Tip Jars Be Illegal?

A Minnesota case raises a question over the legality of forcibly pooling cash tips.
Business Writers
June 15, 2012

Got a communal tip jar by your cash register—or ask all your employees to share in a tip pool?

A Minnesota waitress is claiming this practice is illegal, and has filed a class action suit.

Natasha Foss, a former waitress at the Canadian Honker restaurant in Rochester, Minn., said she was fired for insubordination after she contributed less than the required two percent of her total sales to the tip pool March 7 and 8.

Foss' complaint, filed in Olmsted County District Court, alleges that the tip pool violates a Minnesota law that protects employees from being required to share gratuities. (Andrew R. Frisch, a Florida lawyer, has filed several complaints around the country in recent years over what he calls "wage theft," or the practice of sharing tips with managers.) However, according to theLegal Aid Society sharing among employees who "somehow help the customer," is probably legal.

Foss started working for the Canadian Honker in 2005 and was fired March 9, according to court documents cited by the Rochester Post-Bulletin. For two years she was employed as a hostess, and then became a waitress. On March 7, according to the complaint, a manager questioned Foss after she put $9 into the pool instead of the required $11 (or 2 percent of her sales that day). On March 8, she left $7 in the tip jar instead of the $9. She allegedly was questioned again, then fired. (She said she began cutting back on her contributions after she learned the tip practices might be illegal.)

Steven Smith, Foss's Minneapolis lawyer, told Minnesota's KAAL-TV more than 30 people could join the class action suit.

Carissa Merritt, manager at another local restaurant, told the station: "Legally in the state of Minnesota you can't force anybody or make anybody tip another employee who makes at least minimum wage."

Canadian Honker manager Nick Powers says he is confident the case will "unfold in [the restaurant's] favor."

A hearing has yet to be scheduled; Foss is seeking a jury trial.

There is legal precedent in other states for the practice of pooling tips. In May, bartenders and servers at four Columbus, Ohio bars won a $150,000 settlement. Former bartender Victoria Zwerin filed the suit in U.S. District Court in Columbus in June 2010. It charged that employees were forced to share their tips with managers and thus sometimes did not receive minimum wage—which is illegal.

What is your tip policy? How has it evolved?

Photo credit: iStockphoto/Thinkstock

Business Writers