Minnesota: Employers Cannot Fire Employees for Refusing to Share Tips

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October 11, 2017

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The Supreme Court of Minnesota recently affirmed that employers cannot terminate an employee for refusal or failing to share gratuities.  In Burt v. Rackner, Inc., a bartender was instructed to share a greater portion of his tips with bussing staff.  Upon his failure to do so, the bartender was terminated, and he filed a lawsuit for wrongful termination.

he Supreme Court stated that the Minnesota Fair Labor Standards Act (MFLSA) allows employees to seek wrongful discharge damages, including back pay and other relief, for any violation of the MFLSA, including the tip-sharing provision.  Under the MFLSA, employers cannot require an employee to share tips, though an employee may voluntarily choose to do so, free of employer coercion or participation.  Threatening termination for failure to share qualifies as coercing the employee to share tips.

While the defendant argued that the tip-sharing provision of the MFLSA does not expressly forbid discharge for failure to share tips, the Supreme Court found it unreasonable to interpret the MFLSA in a manner that prohibits mandatory tip-sharing, yet allows discharge of an employee who fails to do so.

Action Items

  1. Have tip-sharing policies and practices reviewed for compliance.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2017 ManagEase, Incorporated.

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