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.