Fix My Job: Compensation

Is your boss stealing your tip money?

Ever get the feeling your boss has his or her hand in your pocket? As in taking a share of money that’s rightfully yours?

Many waiters and others who rely on tips for a sizable chunk of their incomes have this problem. As described by former Manhattan waiter Steve Dublanica, who blogs at, bosses have a bagful of tricks to take what doesn’t belong to them, such as pocketing the tips added to a credit card bill – and keeping a cut for themselves when the money is passed along to the wait staff, days later.

“When tips are distributed by check,” says Dublanica, “it’s never, ever accurate. Not malicious intent usually, just lazy bookkeeping. But sometimes it’s greedy evil.”

Other practices are definitely greedy and evil, says Dublanica, including:

  • Outright stealing from the tip jar – usually in a “pool house,” where tips are pooled and some of the money is supposed to be shared with bartenders, waiters and others who assist waiters. There’s less to share, of course, if the boss takes a piece off the top.
  • Using tip money to pay pastry chefs, banquet managers and others who do not directly serve customers.
  • Creating no-show jobs for friends or relatives, then giving the no-shows a full cut from the tip pool.
  • For tips left on credit cards, passing along to waiters the charge collected by the credit card company – sometimes on the entire tab, not just the tip.
  • Using tip money to pay dishwashers and kitchen staff. “Instead of paying their hardest-working employees more,” says Dublanica, “quite a few owners will steal it from the waiter.”

How to get your money back

  1. Tell your boss or supervisor: As Dublanica notes, your tips may be short because of bad bookkeeping or honest mistakes. If you’re not collecting what you think you are due, ask your boss or supervisor, right away, to make up the difference – preferably in cash, on the spot. (Since patrons pay tips in real time, bosses can’t really argue that they don’t have the money.)
  2. Keep your own records: If there are continual “mistakes” in your share of tips, the errors may be less than honest. Keep your own record of how much you collect from your customers in tips, and how much your boss pays you.
  3. File a complaint: Many of the practices described above – such as giving a share of tips to no-show workers – are illegal. You can file a complaint with the U.S. Department of Labor, Wages and Hour Division, which enforces the federal Fair Labor Standards Act (FLSA). You can also contact the state labor agency in the state where you live.
  4. Talk to your coworkers: Are other staff having the same problem? This can be dicey, as some practices – supplementing crummy pay in the kitchen with a share of waiters’ tips – may be negative for one group of employees, but positive for others. Still, you’re more likely to reach a solution that works for everyone by talking to everyone affected.
  5. Talk to the boss – as a group: If your boss or supervisor has to confront an angry team of workers, instead of just one unhappy employee, he or she may quickly see the merit in putting a stop to shady practices. Also, anytime you join together to address workplace problems, you’ve ordinarily got more legal protection than when you act alone.

Useful Links

Article: “Are You a Waiter Tired of Getting Ripped Off?”

Government agency: U.S. Department of Labor, Wages and Hours Wage and Hour Division

Government agency: “How to File a Complaint,” U.S. Department of Labor, Wage and Hour Division

Government agency: “State Labor Offices,” U.S. Department of Labor, Wage and Hour Division


Thanks to heavy lobbying by the restaurant industry, the federal minimum wage is a measly $2.13 for waiters who earn tips. If tip money doesn’t add enough to reach the standard $7.25 minimum wage, the restaurant owner is supposed to make up the difference. Many states have different wage standards for tipped employees; the U.S. Department of Labor has a summary table that will show the minimum in the state where you live. If your tips plus wages don’t add up to the minimum for your state, your boss is breaking the law, and you have a right to file a complaint.



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