Expert: Shirley McAllister, CPP, PHR - 4/20/2011

Question
I'm trying to find out if salaried employees in Illinois can receive tips in addition to their salary.  I haven't been able to find anything specific for Illinois on this subject.

Answer
The reason you cannot find anything specific is because salary and hourly employment are not addressed with tips. Most generally tipped employees are hourly employees thus the tip credit allowed the employer. The tipped employee must be directly involved with service the needs of the customer such as a waitor or a waitress. Management staff generally do not qualify to receive tips .

Generally the salaried staff are management employees. Non tipped positions may not collect tip money. If the employee is hourly paid an hourly rate but paid through a salary than they are really an hourly employee.

If the employee works part of the time in management and than part of the time waiting tables that person could only receive tips when he /she is waiting tables.

Here is the Illinois Department of Labor website where it talks about tips but the salary and hourly aspect is not discussed.


http://www.overtimewageclaims.com/special_cases.html

Are there special rules for tipped employees?

Congress has enacted a special exception to the rules for computing the minimum wage for tipped employees. An employer is permitted to pay tipped employees a "cash wage" of only one-half the 1996 minimum wage ($4.25/hour). This means employers can pay tipped employees a cash wage of only $2.12 an hour, and it may credit tips to make up the rest of the minimum wage.

The tip credit the employer receives may not exceed the value of the tips the employee has actually received. If this amount fails to meet the minimum wage, the employer must make up the difference.

Employers may apply the tip credit only if:

The employee is working in a job in which the employee customarily and regularly receives $30.00 a month in tips;
The tipped employee has been informed by the employer about the tip credit law and that the employee must be allowed to retain all tips the employee receives, with the exception that tip pooling with other employees arrangements are allowed; and
Employers cannot require employees to share tips with their employer.
If an employer violates any of these three elements, a tip credit is not allowed.

EXAMPLES OF EMPLOYER ABUSE OF THE TIP CREDIT

Examples of employer abuse concerning the tip credit are employers who compel employees to kickback tips or who do not provide employees with all the tips received. For examples, some restaurants mandate a 15% or higher tip charge on large parties at a restaurant. This is a tip that is the employees to keep if the employer is using the tip credit provisions of the Act. Another example is that some employers will work employees at two jobs — one is a job in which tips are received and one is not. For example, an employee who works part of his shift as a waiter and part as a host at a restaurant. The employer should not take the tip credit for the entire shift — but only for the time the employee works as a waiter.

Shirley