New Mexico Tip Sharing Laws for Restaurant Workers

 In Employment Law, Overtime Law, Wage Law

Tips, Tip Credits, and New Mexico Tip Sharing Laws

If you are a restaurant worker in New Mexico who receives tips, this article will tell you everything you need to know about tips, tip credits, and New Mexico Tip Sharing Laws. If you are a restaurant worker in New Mexico and your employer violates your rights as a tipped worker, you are entitled to claim recovery of all back wages and tips to which you are lawfully entitled under federal law and New Mexico law.

If you think your rights as a tipped worker in New Mexico have been violated, call us here at Herrmann Law at (817) 479-9229. We are top-tier worker-focused labor litigators. We help vindicate employee rights and punish employer rights violations. Here is some basic information about tips, tip pooling and tip credits in New Mexico.

What is a Tipped Worker in New Mexico? What is a Tip under New Mexico Law?

Under New Mexico labor laws, a “tipped worker” is defined as any worker who “regularly” earns at least $30 a month in tips. That is a broad definition. In addition, under federal law, the definition of a “tipped worker” is not based on monthly tips, but rather on the type of work and whether the worker is of the type that “customarily” receives tips.

As in every other State, the rule in New Mexico is that tips received by a worker are OWNED by the worker. That is, your employer CANNOT steal your tips. Tips are amounts voluntarily given by customers.

What is Mandatory “Tip Pooling” and is Tip Pooling Allowed in New Mexico?

Tip Sharing (sometimes referred to as Tip Pooling) is an arrangement where an employer requires all tips to be “pooled” and then shared with all contributing employees. New Mexico Tip Sharing is legal in New Mexico so long as the employer follows specific rules and laws. Essentially, New Mexico tip sharing is lawful, if the employer can show that the tip pool was restricted to being shared solely among customarily “tipped employees.” That is, servers, bartenders, bussers, and other non-managerial employees who work in the “front-of-the-house” may be included in the tip pool, but non-tipped workers — like cooks, dishwashers, prep line cooks, management staff, off-hour employees, cleaning staff, or any other “back-of-the-house” staff — cannot legally be included in a tip pool or paid with tips from a tip pool. An employer or manager can NEVER participate in a tip pool or retain any tips from the tip pool for any other purpose. Thus, managers, supervisors, owners, and the like cannot be part of a tip pool or receive any tips. If your employer violates these rules, your employer will be liable for paying all wages, tips, and other damages owed under federal and New Mexico law.

What is the “Tip Credit” under New Mexico Law?

Like most States, New Mexico has a minimum wage. In 2022, the New Mexico minimum wage is $11.50 (with a scheduled rise to $12.00 in 2023). In addition, like most States, New Mexico allows employers to “use” tips to satisfy their obligations to pay the minimum wage. A New Mexico employer is allowed to pay a cash wage of $2.80 and then “use” $8.70 of the worker’s tips to satisfy the minimum wage. If, however, the worker does not receive at least $8.70 per hour in tips, then the employer must increase the cash wage to ensure that the worker receives the minimum wage. Note that some New Mexico cities have enacted ordinances that are more restrictive. Santa Fe County, for example, requires a minimum cash payment of $3.88 as of mid-2022.

Call the Employee Rights Attorneys at Herrmann Law Today

For more information, call the Employee Rights attorneys at Herrmann Law. If you think your employer violated the law or your rights as an employee, call us. We are proven, experienced, employee-focused attorneys representing workers across the United States, including workers in New Mexico, in all types of workplace disputes. Use our Online Contact page or call us at (817) 479-9229. We are more than just a law firm for employees – we are an employee’s fiercest advocate, equipping employees with the legal representation needed to achieve the best result possible.


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