If you work in a job where you receive tips, understanding your rights is crucial. In Michigan, specific laws regulate how employers handle tips. Knowing regulations regarding tip withholding helps ensure you receive the compensation you deserve.
Michigan’s tipping laws
Employees who receive tips are typically considered “tipped employees.” These include workers in restaurants, bars, and service industries where tipping is customary. State law aligns with the Fair Labor Standards Act (FLSA) regarding tips and wages.
Employers must follow certain guidelines when handling tips. They can take a tip credit, allowing them to pay tipped employees a lower hourly wage. However, this is only allowed if the employee’s total earnings (hourly wage plus tips) meet or exceed the minimum wage. As of 2024, the minimum wage in Michigan is $10.33 per hour. There is a lower rate of $3.93 per hour for tipped employees, provided tips make up the difference.
Employers can also require tip pooling. This means employees share their tips with other staff members. However, only employees who regularly receive tips can participate in the pool. Employers, managers, and supervisors cannot take part in tip pooling.
When tips can be withheld
There is only one circumstance under which an employer can withhold tips in Michigan. When customers tip by credit card, employers can deduct a proportionate amount to cover the processing fee. However, the deduction must not exceed the actual cost of the fee.
It is illegal for employers to withhold tips for any other reason. They may not withhold tips as a form of punishment, to cover business expenses, or to add to their income. If an employer does this, they are violating both state and federal laws. Knowing your rights can help you take action and receive justice if this occurs.
Ensuring fair treatment in the workplace
Understanding tipping laws can empower you in the workplace and protect your earnings. If you believe your employer is unlawfully withholding your tips, you have options.
First, keep detailed records of your tips and any discrepancies you notice. This documentation can serve as evidence if you need to file a complaint. You can file a complaint with the Michigan Department of Labor and Economic Opportunity. They will investigate your claim and determine if your employer has violated the law. Consulting with an employment attorney can also provide guidance.
Being proactive not only secures your rightful earnings but also contributes to a culture of fairness and respect. By staying vigilant, you help uphold standards that benefit all tipped employees. This helps ensure that employers reward hard work appropriately moving forward.