Tip Credit Cases

Tip Credit Cases

ATTORNEY ADVERTISEMENT: Investigations are underway regarding potential wage thefts by a number of restaurants, your employer might be one.

HOW TO MAKE SURE YOUR EMPLOYER ISN’T CHEATING YOU OUT OF YOUR TIPS!

For many restaurant workers, such as servers and bartenders, the only way to earn a livable wage is through hard-earned tips. While the federal minimum wage is $7.25 per hour, under the Fair Labor Standards Act (FLSA) employers are permitted to take a “tip credit” and pay as low as $2.13 per hour to employees who are considered “tipped employees.”
Wage theft is widespread in the restaurant industry. Many high-profile establishments have found themselves paying out millions to settle unpaid wages cases, which are often related to unpaid tips, off the clock work, and overtime.

THERE ARE MANY WAYS IN WHICH EMPLOYERS COMMIT WAGE THEFT AGAINST TIPPED EMPLOYEES

WHEN AN EMPLOYER REQUIRES TIPPED EMPLOYEES TO SHARE TIPS WITH NON-TIPPED EMPLOYEES
Tips earned by an employee are his or hers to keep unless the employer establishes a valid “tip pooling” system to share tips amongst tipped employees. A valid tip pool can only include “front of the house” employees like bussers and hosts who regularly interact with customers. An employer cannot distribute a tipped employee’s tips to non-tipped employees, such as “back of the house” kitchen staff or janitors.

WHEN OWNERS OR MANAGERS KEEP A PORTION OF TIPS FOR THEMSELVES
Many employers violate the law by “putting their hand in the cookie jar” and taking a portion of employees’ tips. Owners and managers cannot share in tips.

WHEN AN EMPLOYER REQUIRES EMPLOYEES TO WORK OFF THE CLOCK
It is illegal for employers to require employees to perform off-the-clock work. Employers violate the law when they require employees to perform work before clocking in or after clocking out or do other work-related activities like attend meetings or conference calls while off the clock. It is also illegal for employees to work for tips only and not receive any wages.

WHEN EMPLOYERS MAKE ILLEGAL DEDUCTIONS FROM TIPPED EMPLOYEES’ PAY OR TIPS
Many employers will deduct from employees’ pay or tips, or make employees pay out of their own pocket, for things like uniforms, supplies, breakage, customer walkouts and cash register shortages. Often, these deductions cause employees’ wages to fall below minimum wage.

WHEN AN EMPLOYER REQUIRES EMPLOYEES TO DO WORK UNRELATED TO TIPPED WORK
It is a violation of the law to require an employee who is being paid the tipped minimum wage to perform job duties unrelated to their tip-producing occupation, to perform job duties that do not produce tips at times other than immediately before or after their shifts, or to perform job duties that do not produce tips for an unreasonable amount of time.

WHEN AN EMPLOYER CALCULATES OVERTIME BASED ON THE TIPPED MINIMUM WAGE
Employees are entitled to be paid time and a half when they work more than 40 hours in a week. Many employers either mistakenly or purposely miscalculate overtime by paying time and a half on the tipped minimum wage, which may be as low as $2.13 per hour under federal law, instead of on the full minimum wage. Employers are required to calculate tipped employees’ overtime based on the full minimum wage rate.

We are investigating a number of restaurants for potential wage thefts. If you worked as a tipped employee in the restaurant industry in the past 3 years and you believe your employer did not pay you the tips, minimum wages or overtime compensation you were owed, we are here to help.

Please click on the Contact Us form on the right and complete the form and a member of our law firm will contact you to answer any questions you may have about your rights, potential claims and possible damages.