Can my employer withhold my tip money?

For the last couple years, I have been an employee (did not make hiring/firing decisions, received a W-2 from manager/owner) of a profitable band. Recently after receiving a very large tip from a wealthy patron at a venue we played at regularly, I was fired. I received less than 2/3 of my quarter share. Though we have nothing in writing, we had a long-standing arrangement to split tips evenly (although I've read that the employer/manager--also a player in the band--is prohibited from participating in a tip pool?), and this can be confirmed by musicians we've played with over the years. Though tips are a small portion of what we made as a group, I understand that I am to be considered a "tipped employee" as I regularly made $30 or more a month in tips. My former employer justified the deductions from my quarter share in three parts: 1) He never W-9'd any substitute players in the group, making his income appear larger than it actually was. He deducted all of the tax burden from these cases of substitution from my tip share, although my substitutes accounted for less than 20% of the tax burden. 2) I showed the tip to an employee of the venue. Word got back to management and I was blamed by the band for not making an amount for a special gig that we "could have made" had the management not know of the tip, although this hypothetical higher amount was never agreed upon or put in writing. The entire hypothetical amount (including what would logically have been my quarter share, had we made the mythical amount) was deducted from my share of the tip. 3) The employer also deducted an arbitrary amount to pay for business expenses for the promotion of the group taking place after my dismissal from the group. My question is does he, my former employer, have the right to keep this tip money (wages) and if not, is it a violation of FLSA? Did he have the right to take part in tips anyway as an employer? Even in a tip-pooling situation, doesn't it have to be “fair and reasonable”. Leighton v. Old Heidelberg, Ltd. (1990)? What is his legal responsibility in not reporting tips or substitute income to the IRS? Thanks and major kudos to the attorney who can answer this seemingly tough question!

0 answers  |  asked Jan 22, 2013 9:10 PM [EST]  |  applies to Texas

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