Tipping the Balance

As a barista at a Starbucks in La Jolla, Calif., Jou Chou counted on tips as a vital part of his compensation. But every time a customer put his change in the tip jar, Chou felt he was getting shortchanged. The coffee giant has a companywide policy of pooling tips between service employees. That means the money customers put in tip jars doesn't go directly into workers' pockets at the end of their shifts, but rather gets put away and distributed proportionally to store employees based on the number of hours they worked in a given week.

Among the employees included in Starbucks' tip pools are shift supervisors--a category of employees who make and serve coffee, but also manage the store and assign tasks to other workers. Chou sued Starbucks in 2006, alleging that the policy violated California law. In March, a California Superior Court Judge ordered the coffee chain to pay a class of 120,000 former baristas $105 million in withheld tips and interest.

"In Minnesota, if employees decide to share tips with each other, that
decision must be made independently of the employer's influence," says E. Michelle Drake, who represents Minnesota baristas in their proposed class action.

Other state laws offer variations on these themes. Several states, such as Delaware and Massachusetts, prohibit employers from requiring tipped employees to share their tips with staff who do not customarily receive tips, including cooks, busboys or sometimes bartenders.

Adele Nicholas

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