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Employees can't be required to share their tips with employees who don't usually receive their own tips, like dishwashers or cooks, unless the employer doesn't claim a tip credit and pays the employee the minimum wage directly.
And tips from a tip pool can't go to the employer, managers, or supervisors.
Some restaurants tack a “mandatory service charge” on to bills for large tables of diners, private parties, or catered events.
Under federal law and in most states, this isn't considered a tip.
If the employer has to pay the credit card company a processing fee, some states allow the employer to subtract a proportionate amount of the tip to cover the employee’s “share” of the fee.
For example, if the credit card company charges a 3% fee, the employer could legally reduce the employee’s tip by 3% as well.
You can find out more about Indiana minimum wage, tip rules, overtime standards, and other wage and hour issues at the Indiana Department of Labor.
The basic rule of tips, under federal law and state law, is that they belong to the employee, not the employer.
Under federal law and in most states, employers may pay tipped employees less than the minimum wage, as long as employees earn enough in tips to make up the difference.This is called a "tip credit." The credit is the amount the employer doesn't have to pay, so the applicable minimum wage (federal or state) less the tip credit is the least the employer can pay tipped employees per hour.If an employee doesn’t make enough in tips during a given workweek to earn at least the applicable minimum wage for each hour worked, the employer has to pay the difference.Even if the customer thinks that money is going to you and doesn't leave anything extra on the table, your employer can keep any money designated as a "service charge." The law generally considers this part of the contract between the patron and the establishment, not a voluntary acknowledgment of good service by an employee.Many employers give at least part of these service charges to employees, but that's the employer's choice: Employees have no legal right to that money.
Many states, including Indiana, allow employers to require tip pooling or “tipping out.” All employees subject to the pool have to chip in a portion of their tips, which are then divided among a group of employees.can't be required to pay more into the pool than is customary and reasonable, and the employee must be able to keep at least the full minimum wage.