Gratuities in the Restaurant Industry—What’s Going On?

Tipping one’s server seems like a simple process (aside from the difficulty of calculating how much to tip, of course).  From an employment law perspective, however, the common practice of tipping in certain occupations combined with minimum wage laws presents a unique conundrum for employers.  

Must they pay the full minimum wage, knowing that their employees are receiving tips on top of it?  

Or, can they pay less, taking the chance that the employee will not make the minimum wage? 

Can they pool tips?  

Can they take a portion of tips?

“A tip is a sum presented by a customer as a gift or gratuity in recognition of some service performed for him. It is to be distinguished from payment of a charge, if any, made for the service. Whether a tip is to be given, and its amount, are matters determined solely by the customer, who has the right to determine who shall be the recipient of the gratuity.”  29 C.F.R. § 531.52 

Tips were traditionally paid in cash, which caused…