The legality of a given employee’s participation in a tip pool under the FLSA turns on whether the participants are “Tipped employees” under 29 U.S.C. § 203(t). The specific question is whether they “engaged in an occupation in which [they] customarily and regularly receive[] more than $ 30 a month in tips.” A new decision from the District Court for the Southern District of Florida concludes that poker room cashiers satisfy this standard under its plain language. Palacios v. Hartman & Tyner, Inc., 2014 U.S. Dist. LEXIS 172859 (S.D. Fla. Dec. 15, 2014).

The issue in Palacios was straight-forward: namely, whether Plaintiff poker room poker dealers could be required to pool tips with cashiers engaged in the traditional duties of exchanging chips and currency at the chip cage inside the poker room. Defendants presented unrebutted evidence the cashiers themselves received $30/month in tips directly from customers as set forth in the statute, outside of any tip pool participation. The court held that this established the employee was engaged in a tipped occupation under the plain language of 29 U.S.C. § 203(t). The Court did not require that the employee spend a specific amount of time performing direct customer service to be deemed a tipped employee.

Claims continue to be brought challenging employer tip practices under wage-and-hour laws and, at times, consumer protection statutes. Businesses permitting tipping, whether incorporating such tips into their wage practices through a tip credit or not, must analyze their exposure to such claims.