Know Your Rights for Tipped Workers

Regulations that govern labor standards can be complex, spanning local, state, and federal law. We provide information on some of the most common violations in selected jurisdictions and sectors that are especially non-compliant.

All employees in Arizona are covered under the state’s minimum wage law, except for persons who are employed:

  • by their parent or sibling;
  • performing babysitting services in their employer's home on a casual basis;
  • by the State of Arizona;
  • by the United States; or
  • by a small business with less than $500,000 in gross annual revenue that is also exempt from having to pay the federal minimum wage pursuant to the Fair Labor Standards Act.

You may also have minimum wage rights under the federal Fair Labor Standards Act. Workers in Flagstaff and Tucson have additional rights under local minimum wage ordinances.

Tips for Tipped Workers in Flagstaff, AZ

(Tipped workers outside of Flagstaff should scroll down.)

Invalid Tip Pools

One of the most common ways restaurants and bars steal your wages in Flagstaff is by running invalid tip pools. According to the local ordinance (the City Code, Title 15 - Labor), tips belong only to tipped employees. If your employer pools your tips and shares them with employees in the back of the house or anyone whose work doesn’t customarily earn tips while paying you at the subminimum tipped wage rate, the employer is stealing from you. Tip pools can't include managers/ supervisors or business owners.

Tasks That Don't Earn Tips

Federal regulations (known as the “Dual Jobs Rule”) explain that if you work in more than one occupation for an employer, such as if you are a maintenance worker and a waiter, you may only receive the tipped minimum wage for your hours worked as part of your tipped job. Thus, you cannot receive the tipped minimum wage for hours worked in a non-tipped occupation, such as a maintenance worker. Pursuant to Arizona regulations, if you work in a tipped occupation, your employer must track the hours you work in any occupation in which you do not receive tips.

Get Justice, Recover Your Stolen Wages

If you suspect your employer is stealing from you, email us at [email protected]. We will do our best to help you navigate through your ordeal. Then, file a complaint with the City's Office of Labor Standards. The Office is required to keep your complaint confidential. The employer is prohibited from retaliating against you for seeking compliance. If an employer has violated your right to be free from retaliation, the Office of Labor Standards or court will order the employer to compensate you no less than $250 for each day the violation continues or until the legal judgment is final. Any employer who fails to pay the wages required under the local ordinance must pay the employee the balance owed, including interest and an additional amount equal to twice the underpaid wages. 

Record-keeping

While it would be unreasonable to expect you to track wages and tips as systematically as employers are equipped and required to do, when possible, it is helpful to keep track of your tips so you can identify when your paycheck does not reflect your full earnings. A sample tracking tool is available here. Alternatively, you may use a tip-tracking app like ServerLife or Tip Tracker to record their tips.

Tips for Tipped Workers in Arizona

(Tipped workers in Flagstaff should scroll up for additional protections under the local ordinance.)  

The Basics

Under Arizona’s minimum wage law, your employer may pay you up to $3.00 per hour less than the minimum wage if you “customarily and regularly” receive tips. This means that if you receive tips on a consistent and recurrent basis—such as if you are a server, bellhop, hairdresser, etc.—your employer may pay you the tipped minimum wage.

To pay you the tipped minimum wage, your employer must be able to establish that for every week, your tips and wages together satisfy the minimum wage for all the hours you worked. Additionally, if your employer intends to claim a tip credit toward the minimum wage, they must provide you with written notice before they claim the tip credit when you’re hired or assigned to a tipped position, and your employer must give you written notice of the amount per hour that they take as a tip credit.

Tip Pools

Your employer may require you to pool your tips in a tip pool. Under Arizona State law, even if the tip pool includes non-tipped employees, your employer may still claim the tipped minimum wage for tipped employees in the pool. However, only the amount of tips you actually retain may be considered for purposes of determining whether you are being paid the minimum wage.

Tasks That Don't Earn Tips

Federal regulations (known as the “Dual Jobs Rule”) explain that if you work in more than one occupation for an employer, such as if you are a maintenance worker and a waiter, you may only receive the tipped minimum wage for your hours worked as part of your tipped job. Thus, you cannot receive the tipped minimum wage for hours worked in a non-tipped occupation, such as a maintenance worker. Pursuant to Arizona regulations, if you work in a tipped occupation, your employer must track the hours you work in any occupation in which you do not receive tips.

Get Justice, Recover Your Stolen Wages

If you suspect your employer is violating the state’s minimum wage law, you can file a complaint with the Labor Department of the Industrial Commission or file a civil action in any court of competent jurisdiction. (You can also email us at [email protected], and we will do our best to help you navigate through your ordeal.) When you submit a complaint, the Labor Department will keep your name confidential for as long as possible, and if it determines that it needs to disclose your name to investigate the complaint, it will only do so with your consent. Any employer who fails to pay the wages required under the state’s law must pay the employee the balance owed, including interest, and an additional amount equal to twice the underpaid wages.

You cannot be retaliated against for asserting your rights under the law, assisting others in asserting their rights, or for informing others of their rights. If you believe your employer has retaliated against you, you can file a complaint related to retaliation under the state’s minimum wage law with the Labor Department of the Industrial Commission of Arizona. If an employer has violated your right to be free from retaliation, the Labor Department or court will order the employer to compensate you no less than $150 for each day the violation continues or until the legal judgment is final.

Record-keeping

Under the state’s minimum wage law, employers are required to maintain payroll records that show the hours each employee worked for each workday and the wages paid to all employees within a 4-year period. However, the Labor Department of the Industrial Commission of Arizona may grant “small employers” (those with less than $500,000 in gross annual revenue) an exemption from the law’s recordkeeping requirements.

While it would be unreasonable to expect you to track wages and tips as systematically as employers are equipped and required to do, when possible, it is helpful to keep track of your tips so you can identify when your paycheck does not reflect your full earnings. A sample tracking tool is available here. Alternatively, you may use a tip-tracking app like ServerLife or Tip Tracker to record their tips.

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