If you are an employee in food service, or a member of a restaurant’s managerial staff, you might be curious about tip laws. The specifics of tip laws vary by state, and since our offices are located in Utah, we will focus on Utah’s tip laws. As with minimum wage practices, tip laws are determined on a state by state basis, and trying to tackle the differences in all 50 states could be a taxing endeavor.
There are two primary factors to consider when discussing tip laws in Utah. First, it is important to note that tip pooling is legal in our state, but it is not a free for all. There are specific regulations which pertain to this practice, and to which restaurant management must adhere. For example, back of the house employees such as dishwashers, janitors, cooks, and chefs are not eligible for tip pools. However, managers who fill in for front of the house positions for a shift are eligible. Additionally, if a tip pool is common practice in an establishment, employees must be informed of the practice when they are hired. The arrangement must be made in writing, or it is not legally binding. Employers will be happy to note that they can deduct credit card company fees from tips made to staff via credit cards.