Wage Rights: Tipped Employees

I have represented thousands of servers and bartenders in for wage theft in violation of the Fair Labor Standards Act. Just because a practice is common and considered customary does not mean it complies with the law.

“Gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons.

An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.

The federal minimum wage is currently $7.25 per hour. Some states have higher minimum wages.

The Fair Labor Standards Act permits an employer to claim a tip credit [instead of directly paying full minimum] if the “tipped employee” earn enough tips to satisfy the employer’s minimum wage and overtime obligations.

The maximum federal tip credit is $5.12 per hour.

Meaning the lowest direct wage an employer can pay you for:

hours under up to forty hours per week is $2.13
hour over forty hours per week is $5.76

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Not recording& Not Paying for all Compensable time

If your employer does not record all hours then they are not paying you all your hours. If your employer is claiming the maximum tip credit and paying you only a direct wage of $2.13 per hour, they are really paying you less than $2.13 per hour and violating the law.

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Check your paystubs

If your employer is not paying you at least $5.76 per hour for hours worked over forty hours in a workweek then they are violating the law.

To illustrate a common mistake made by employers claiming a tip credit is multiplying $2.13 per hour by 1.5 and using $3.20 for hours over forty hours per workweek. A

Tipped Employees

I have represented thousands of servers and bartenders in for wage theft in violation of the Fair Labor Standards Act. Just because a practice is common and considered customary does not mean it complies with the law.

“Gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons.

An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.

What is a tip credit?

The federal minimum wage is currently $7.25 per hour. Some states have higher minimum wages.

The Fair Labor Standards Act permits an employer to claim a tip credit [instead of directly paying full minimum] if the “tipped employee” earn enough tips to satisfy the employer’s minimum wage and overtime obligations.

The maximum federal tip credit is $5.12 per hour.

Meaning the lowest direct wage an employer can pay you for:

hours under up to forty hours per week is $2.13

hour over forty hours per week is $5.76

Not recording& Not Paying for all Compensable time

Not paid for time waiting for tip out

Employer fails to record and pay for time spent after you have clocked out.

This frequently occurs because an employee is required to clock-out to run sales report and wait for the tip-out process to occur.

Not paid for breaks never taken

Employers may automatically deduct for meal breaks or rest breaks that were never taken. If you are required to stay at your job station and eat in the event a customer appears then you are being engaged to wait – and that is likely compensable.

Check your paystubs

iLLEGAL TIP-SHARING ARRANGEMENTS

Tipped employees cannot be required to tip out the owner, managers, supervisors, cooks, chefs, dishwashers, and other kitchen staff do not qualify as “tipped employees.”

$5.12 per hour x 2 for every hour participating in illegal tip-sharing arrangement

Customary practices may violate the law

Paying for Breakage

Paying for walk-outs

Non-tipped producing work exceeds 20% of work time

Paying for logoed mandatory uniform items

Resources

Tipped Employees

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