Large restaurant chains have paid millions of dollars in settlement money for improper tip pooling arrangements. There are trends in lawsuits under the Fair Labor Standards Act (FLSA). Recently, suits by tipped employees suing their employers has become popular. Restaurants and bars of all sizes, across the country, are being sued by tipped employees who claim that they were tipped improperly. This is because there are a set of complex regulations as to how tipped employees are paid, and how they are informed about their pay. A business can pay a tipped employee correctly, but inform them of their pay incorrectly, and be subject to a lawsuit. The issue of who can be included in a tip pool is complex and evolving. Including one employee, in a tip pool, who the law considers untipped, invalidates the way all tipped employees were paid.  How a tipped employee who does not tip out is informed of their pay, and the requirements on an employer relying on their state’s tip credit, is not as easy as following the advice of a payroll company. I have handled several FLSA Lawsuits for owners who relied on their payroll, and POS, companies. For advice on how to pay your tipped employees properly call Attorney Joshua Sheskin at Lubell Rosen at 954-880-9500 or JHS@LubellRosen.com.