Hospitality Employee Employment Agreement

Federal law strictly prohibits managers, supervisors, and business owners from participating in employee tip pools, regardless of whether the employer takes a tip credit. They can only keep tips they receive directly from customers for services they solely and personally provided. Including them in a shared pool can result in severe wage theft penalties.

A tip credit allows employers to pay tipped employees less than the standard minimum wage, provided their earned tips make up the difference. If your state permits this practice, the exact tip credit allowance and the guaranteed base rate must be explicitly stated in the employment agreement. Employees must also receive formal written notification of these terms before the credit is applied.

Reporting-time pay guarantees employees a minimum number of paid hours if they report for a scheduled shift but are sent home early due to slow business. The agreement must outline these minimum paid hours in accordance with your state's labor laws, which typically require half of the scheduled shift's hours to be paid. Clearly defining this policy in the contract prevents disputes when business levels fluctuate unexpectedly.

Federal law allows employers to require employees to purchase their own uniforms, provided the cost does not reduce their net earnings below the federal minimum wage during that pay period. However, many states require employers to fully pay for and maintain any uniforms that bear a company logo or are highly specific. Your agreement must clearly outline who pays for the uniform and who is responsible for laundering it.