Employees working in the service or hospitality industry often rely on tips as a substantial part of their income. State laws in New York even offer special minimum wage restrictions for such occupations, including those in hotel service or the restaurant industry. Other occupations, such as car wash attendants, hairdressers, instructors, parking attendants and doorpersons, are not considered under the Hospitality Industry Wage order, but are still included under Miscellaneous Wage Orders. For these employees, any gratuity or tip, is to be received in full by the employee.
New York State Labor Law Section 196-d, applies to "all private sector employees in all industries" and "prohibits an employer or their agent from demanding or accepting, direction or indirectly, any tip left for an employee, or retaining any part of a charge purported to be a tip." Lower wage earning employees, such as servers and waiters, may be especially vulnerable to an employer withholding tips when the tip is paid for through a debit or credit card.
Tips are important for food service workers and service employees in hotels, as state laws allow employers to pay lower than the standard minimum wage, allowing for tips to make up the difference. If a business is withholding tips, it may lead to an employee earning less than minimum wage.
For employees working in such industries, it is important to track your earnings, including tips. Whether intentional or accidental, withholding tips is illegal, and any employee who is involved in a wage-and-hour dispute should make every effort to fix the problem and collect their well-earned and deserved wages, including any and all tips from customers.
Source: By New York State Department of Labor, "Tips and Gratuities Frequently Asked Questions," Accessed on Sept. 27, 2016