Utah Tip Wage and Tip Sharing Claims

---

In Utah, tips are considered part of an employee's pay in certain jobs, like serving in restaurants

or bars. Employers can use tips to help meet the required minimum pay, but there are strict rules

to protect workers. If an employer breaks these rules, an employee can make a "wage claim" to

get the money they're owed. This summary explains the basics in everyday language, including

what a claim looks like, who it applies to, how to prove it, the steps to file one, and what proof

you need.

A wage claim is when an employee says their employer didn't pay them correctly, especially

involving tips. Under Utah law, tips belong to the employee, but employers can set up "tip

sharing" (also called tip pooling) where workers combine and divide tips. Problems happen if the

employer doesn't follow the rules, like keeping tips for themselves or not making sure pay

reaches the minimum amount.

Generic Examples:

• A server makes $2.13 per hour in base pay plus tips. If their tips for the week don't add up to at least $7.25 per hour total (Utah's minimum wage), the employer must cover the difference. If they don't, that's a claim for unpaid wages. 
• In a restaurant, servers share tips with kitchen staff through a tip pool. If the employer didn't put the sharing plan in writing or lets managers take a cut (which is not allowed), employees can claim the setup is unfair and demand their full tips back.
• A bartender's tips are short because the employer deducts too much for credit card fees without explaining it. This could lead to a claim if it drops pay below the minimum. 

These claims focus getting back owed money, plus possible penalties for the employer. 

• Employees: This covers "tipped employees" who regularly get more than $30 in tips per month, like servers, bartenders, or hotel staff. It also includes non-tipped workers (like cooks or dishwashers) if they're part of a legal tip sharing group. Minors under 18 can be paid a lower starting rate ($4.25/hour for the first 90 days), but tip rules still apply. 
• Employers: Any business in Utah that pays workers, especially in service industries like restaurants, hotels, or bars. Small businesses and large chains are both covered. Employers can't keep tips themselves and must follow both Utah and federal rules (federal rules are stricter on who can join tip pools if the employer uses tips to meet minimum wage).

Not all jobs qualify—office workers or factory employees without tips aren't usually involved. 

In Utah, a tip pool agreement is a system where tipped employees, like servers or bartenders,

share their tips with other workers, such as kitchen staff, according to a set plan. Utah law,

combined with federal regulations under the Fair Labor Standards Act (FLSA), sets strict rules

for these agreements to ensure fairness. Below is a clear and simple explanation of what’s

required in a tip pool agreement and what employers must do to comply.

What's Required in a Tip Pool Agreement

A valid tip pool agreement in Utah must include the following elements:

1. Written Agreement: The employer must create a written document outlining the tip pool arrangement. It should be clear and shared with all employees involved.
2. Employee Notification and Consent: Employees must be informed about the tip pool before it starts. While Utah law doesn't explicitly require written consent, employees must voluntarily agree to participate, meaning they understand and accept the terms without pressure.
   1. Who is included in the tip pool (e.g., servers, bussers, cooks).
   2. How tips are collected (e.g., daily cash tips or credit card tips).
   3. How tips are divided (e.g., percentage split, points system, or equal shares). 
   4. When and how tips are paid out (e.g., weekly via paycheck).
3. Fair and Reasonable Distribution: The tip pool must distribute tips in a way that's fair, based on job duties or contributions. For example, a server might get a larger share than a dishwasher due to direct customer interaction. 
4. Eligible Participants: Only employees who regularly interact with customers or support tipped work can be in the pool. Utah follows federal rules, which allow: 
   1. Tipped employees (e.g., servers, bartenders) who earn at least $30/month in tips.
   2. Non-tipped employees (e.g., cooks, dishwashers) if the employer doesn't take a tip credit (pays at least $7.25/hour without relying on tips to meet minimum wage).
   3. Managers or supervisors cannot participate in the tip pool, and employers cannot keep any portion of the tips. 

Employers in Utah have specific responsibilities to ensure a tip pool is legal and fair: 

1. Provide Full Minimum Wage or Proper Tip Credit:
   1. If using a tip credit (paying a base wage as low as $2.13/hour), tips plus base pay must equal at least Utah's minimum wage ($7.25/hour). If tips fall short, the employer must cover the difference.
   2. If no tip credit is taken (employees earn at least $7.25/hour), non-tipped workers like cooks can join the tip pool. 
2. Maintain Transparency: Employers must clearly communicate the tip pool terms to all participating employees and provide records of how tips are collected and distributed. Employees should have access to these records if requested.
3. Ensure Tips Stay with Employees: Employers cannot keep any tips for themselves or use them for business expenses (e.g., paying for broken dishes). All tips must go to the pool or directly to employees. 
4. Comply with Federal and State Laws: Utah law aligns with the FLSA. If an employer uses a tip credit, only tipped employees can be in the pool. If no tip credit is used, the pool can include non-tipped workers, but it must still be fair and documented. 
5. Avoid Excessive Deductions: Employers can deduct credit card processing fees from tips, but only the actual cost of the transaction (e.g., 3% fee on a credit card tip). Any deduction must be explained and not reduce pay below minimum wage. 
6. Keep Accurate Records: Employers must track hours worked, base pay, tips collected and tip pool distributions. These records must be kept for at least three years and be available for inspection by the Utah Labor Commission or U.S. Department of Labor if a claim arises. 
7. Prevent Coercion: Employees must not be forced or pressured into the tip pool. Participation should feel voluntary, even if it's a condition of working in a tipped role. 

To win a claim, you must show these key points with facts:

1. You Were Employed There: Prove you worked for the employer during the time in question.
2. A Rule Was Broken: Show how the employer violated tip or wage laws. For example: 
   1. Your total pay (base + tips) fell below $7.25/hour, and the employer didn't fix it. 
   2. Tip sharing wasn't put in writing or shared with you beforehand. 
   3. The tip pool included people who shouldn't be in it (like bosses), or you were forced to give more than is fair and usual.
   4. The employer kept tips or used them wrongly.
3. How Much You're Owed: Calculate the missing money, like the difference in wages or tips you should have kept.
4. It Happened Recently: Claims must be filed within a reasonable time—usually within 2 years for court cases. 

Utah law says employees keep all tips unless they're in a real tip sharing setup. Sharing must be voluntary in spirit, fair, and documented.

Utah makes it straightforward to file without needing a lawyer right away. Here's the step-by-step: 

1. Gather Your Info: Collect proof (see below) and fill out the Wage Claim Assignment Form from the Utah Labor Commission.
2. File the Claim: Submit the form online, by mail, fax, or in person to the Utah Antidiscrimination and Labor Division (UALD) Wage Claim Unit. Their contact is on the form—call if you need help. It's free to file. 
3. Employer Responds: Th employer gets 10 business days to reply with their side. You can then send a response back. 
4. Investigation: A state investigator reviews everything. They might ask for more details or suggest mediation (a neutral talk to settle without a fight). 
5. Decision: The state issues a "Preliminary Finding" on who's right. If you disagree, you have 10 days to send more proof or ask for a hearing (like a mini-trial with witnesses).
6. Final Order: If no changes, the state makes a final decision. If you win, the order says how much the employer owes, plus possible extra fees or penalties. 
7. Appeal if Needed: If unhappy, ask for a review within 20 days or go to state court within 30 days. If the employer doesn't pay, the state can help collect through court.

The whole process can take months, but mediation might speed it up. You can also file a federal claim with the U.S. Department of Labor if it involves national rules, or sue in court directly (but that's more complex). 

Strong proof makes your case solid. Here's what helps:

• Pay Records: Pay stubs, time sheets, or bank statements showing your hours, base pay, and tips. 
• Tip Details: Logs of daily tips, credit card receipts, or apps tracking earnings. 
• Written Agreements: Any tip sharing plan from the employer (or proof there wasn't one).
• Communication: Emails, texts, or notes from talks with your boss about pay or tips. 
• Witness Statements: Signed notes from coworkers who saw the same issues. 
• Calculations: Your own math showing how much you're short (e.g., hours worked x $7.25 minus what you got).

Keep copies of everything. The state will ask for these during investigation. If you go to a hearing, bring originals and witnesses.

If you're dealing with this, contact the Utah Labor Commission for free advice. This isn't legal advice—talk to an expert for your specific situation.