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Forced Tip Pooling

On Behalf of | Nov 26, 2014 | Employment Law

It is not uncommon in restaurants for the wait and bus staff, bartenders, and other employees to share tips; however, New Hampshire has a specific rule in regards to same. The current rule in statute NH RSA 279:269-b states that tips are wages and property of the employee receiving the tip. Any tip-pooling or sharing arrangement has to be done without coercion from the employer. In a decision dated November 13, 2014 in the case of Ichiban Japanese Steak House, Inc. v. Kimberly Rocheleau and Samantha Greaney the New Hampshire Supreme Court did not reverse the Department of Labor’s decision that Ichiban violated the tip-pooling statute when it had a tip-pooling arrangement in which a prospective employee would not be hired into a wait staff position if they did not sign the tip distribution sheet agreeing to the disbursement of their tips. The Supreme Court found that the Department of Labor’s determination that those facts created coercion by the employer as to the tip-pooling arrangement were not erroneous as a matter of law and therefore must be upheld. Simply put, New Hampshire restaurant owners should be aware that disclosing tip-pooling arrangements to prospective employees to give them the opportunity to either agree or find other employment is not enough.

Furthermore, this November 13, 2014 decision also clarifies that when any employee files a Department of Labor wage claim and thereafter has to go to Court to enforce it they are entitled to attorney’s fees in the Court. The 2012 amendments to the tip-pooling statute clarify that in order to make the tip-pooling arrangement invalid, the coercion has to be by the employer so the pressure of going along with the fellow employees with a tip-pooling arrangement may not be enough to prove coercion that would make the arrangement unenforceable to the pressured employee. This decision makes it more difficult for restaurant owners to have tip-pooling arrangements.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].