Restaurant’s tip-pooling arrangement was okay

A restaurant’s tip pooling arrangement, which required tips to wait staff to be shared with non-waiters such as kitchen workers, didn’t violate federal labor laws, according to a decision by a federal appeals court.

The Vita Café in Portland, Oregon paid its waiters and waitresses $2.10 more than the federal minimum wage. Under its tip pooling policy, the café redistributed tips to all restaurant employees, with the majority (between 55 and 70 percent) going to kitchen staff and the remainder to the servers in proportion to hours worked. A waitress sued the café, claiming this violated federal wage rules. But the court decided that there is no general rule that tips are the property of an employee, and that employees must be allowed to keep all of their tips only if the café has taken a “tip credit” toward its minimum wage obligations.