Maryland Federal Court Issues Opinion on Restaurant Tip Pooling

A couple of weeks ago I wrote a post on tip pooling and the legal pitfalls such arrangement present for bar and restaurant owners.  I mentioned a bar owner in Baltimore who was smacked with a $250,000 lawsuit from his employees for sharing in the tips earned at his bar, at which he also served as a bartender.  As I mentioned, this is generally considered a big no-no, as federal labor law prohibits bar and restaurant management from sharing in tip pools with their employees.  Well, earlier this week, a federal judge in Maryland confirmed this point for bar and restaurant owners here in Maryland.

In the case of Gionfriddo v. Zink, Judge Richard D. Bennett stated that, while the question of management sharing in tip pools was one of first impression in the federal courts of Maryland (as well as the larger Fourth Circuit Court of Appeal), the “clear weight of authority” from other federal courts around the country was that “an owner-employer may not participate in such tip pools.”  With this opinion, that is now the law in Maryland as well.

So, for Maryland restaurant owners and managers, that should settle that.  And it should be a reminder to make sure any tip pooling arrangement, or any other use of the “tip credit” is in compliance with state and federal law.

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One response to “Maryland Federal Court Issues Opinion on Restaurant Tip Pooling

  1. So employers can’t share in a tip pool but they can decide how the money in the tip pool is spent. I don’t get how it’s legal for an employer to confiscate and distribute the tips his workers receive but it’s illegal for the employer to share in the tip pool. What does share in the tip pool mean? What’s the difference between an employer who takes a share of the tip pool and buys himsef a new watch and an employer who confiscates his waiter’s tips and uses them to pay his dishwashers?

    To me, employers are sharing in the tip pool across this country by determining how the money is spent. Employers are being allowed to set up, control and mandate tip pools at the same time judges are ruling that employer cannot share in a tip pool. Would you rather be able to spend the money your employees have collect or would you rather share in the money your employees have collected?

    So it’s ok to spend your worker’s tips as long as you don’t share in your workers tips. Why is it so hard to understand that when an employer decides how an employee’s tips are going to be spent, he is not only sharing in the tips, he is stealing the tips for his own benefit.

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