New York High Court Issues Decision On Tip Sharing

On June 26, 2013, the New York Court of Appeals issued a decision concerning who may lawfully participate in a restaurant tip-sharing system. The state's highest court stated that for employees to receive tips from a tip-sharing arrangement, they must perform, or assist in performing, personal service to patrons as a regular part of their duties. Employees with limited supervisory authority are still eligible to receive tips if they regularly provide service to patrons, but become ineligible once their supervisory duties rise to the level of "meaningful authority." The court also determined that an employer may exclude eligible employees from the tip-sharing arrangement, although the discretion to do so is not unlimited. To learn more about the decision, please see Littler's ASAP, Which Employees Can Have Their Hands in the Tip Jar? Finally Some Clarification, by Michael Weber, Andrew Marks, George Pauta, and Sarah Moss.