This is in Tennessee.
A family member works at a small diner, the base pay is $10/hr, all of the tips that are collected from the credit card machines go into an end-of-year bonus fund which covers some kind of bonus that is based on a performance review (implying they could give less than a fair share if their performance isn’t good enough). It has also been said that they use this fund to pay the owner of the business as well.
I have contacted the Department of Labor and all the guy could tell me was that if the employer pays over minimum wage then it’s outside of his knowledge or jurisdiction. We haven’t filed a complaint yet because it seems like nobody has the answer as to if this is legal or not and we don’t want to initiate anything that could harm the situation unnecessarily.
I’ve never heard of a situation like this and when asked if they would just add the tips to the paycheck it was specifically refused.
Everyone I’ve talked to thinks something fishy is going on and the whole thing just feels wrong, tips belong to the employee and can’t be withheld based on performance. I’ve run into a dead end on information and would appreciate any insight or direction to search further.