Rhode Island: New Protections for Tipped Workers
All Employers with RI Tipped Employees
June 28, 2022
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SB 2246A implements new protections for tipped workers, including prohibiting employers from keeping employee tips, implementing new tip pool requirements, and restricting deductions from tips for credit card processing. “Tipped employees” are “engaged in an occupation in which the employee customarily and regularly” receives more than $30 per month in tips. Key requirements are noted as follows.
- The bill specifically states that employers cannot take “any part” of a tip from an employee.
- Deductions for credit card processing fees are permitted if the employer gives notice to the employee and the amount does not bring the employee below minimum wage.
- Tips must be paid no later than the regular payday, even if the employer is still waiting for reimbursement from a credit card company.
- Tip pools are permitted for employees “who customarily and regularly receive tips,” provided that (1) the employer gives notice to employees of the pool contribution amounts; (2) the employer limits any tip credit to the amount actually received by the employee; and (3) the employer does not keep any portion of the tips (excepting credit card processing fees).
- Non-tipped employees may participate in tip pooling if the employer does not take a tip credit and does not include exempt employees in the tip pool.
- Service charges belong to the employer rather than the employee.
- Service charges shared by the employer may be counted toward minimum wage requirements.
- Review the bill here.
- Review payroll procedures for managing tips and tip pooling.
- Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.
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