Sue Your Restaurant for Unpaid Wages

Patrons and restaurant owners alike believe that the wait staff make the biggest money in the restaurant business. Some employers try to find ways to get a cut of those tips while patrons don’t always recognize the extent of their service and so under-tip. Pinched between these two groups, the wait staff must try to make a living out of whatever is leftover.

When employers become greedy and underpay or illegally pay servers, a lawsuit might be the easiest way to get the restaurant owner’s attention. An employment lawyer recognizes what actions are illegal and actionable under the law. Contact a lawyer immediately when employment discrimination occurs.

Learning the Restaurant Lingo

Every restaurant has its own set of house rules. Of course, the government does specify certain requirements for restaurant staff. But first, understanding the language of the restaurant culture clears up the confusion of different terms.

Tip Credit

Pennsylvania requires that waiters and waitresses earn the full minimum wage per hour. However, the rules differ on how this is done. In most cases, restaurants pay tipped employees at least $2.83 per hour. If a tipped employee doesn’t make enough money in tips to reach the minimum wage of $7.25 per hour for every hour worked, the restaurant must cover the difference. In this case, that would mean the tip credit is $4.42. When a restaurant does not make up the difference between a shift’s pay and the minimum wage hourly pay, they can face legal action.

Who qualifies as a tipped employee and why does it matter?

Hannah, a waitress at a diner with a $2.83 wage, is sent home early because business is slow. She’s only worked three hours, and she had two tables in that time, where she was only tipped $8. Her employer owes her $5.26.

Tip Pool

All employees who are tipped must place extra tips that are over the minimum hourly wage into a tip pool to be split between a group of employees. The law does not obligate tipped employees to share their tips with employees who don’t regularly receive a tip. Also, employers are not permitted to take part in the tip pool.

Tip Out

Although tip outs are not consider tip pools by restaurant staff, the law categorizes tip outs underneath tip pools. Restaurants that don’t use the tip pool often require staff to tip out to other employees, such as bartenders or bussers. The tip out helps encourage bussers and bartenders to help support the wait staff because they all benefit from happy customers.

The positives and negatives of tipping and each method of spreading out the tip comes with a variety of opinions of what is the best. Some wait staff loses tips when a table receives food from the food runner rather than the wait staff. In other cases, the tip seems to be shared with people who have done nothing to earn it. The most important thing is that every employee receives minimum wage. Otherwise, the restaurant is eligible for an unpaid wage lawsuit.

What’s Normal for Wait Staff Tip Outs?

What Should I Do About Miscalculated Overtime?

Nothing is normal. Every restaurant has a different set of house rules or policy. Restaurants where a server does everything from seating the customers to handling payment with just the help of a busser might only share tip with that busser. In other restaurants where the server is the front man to a team of support staff, such as a back waiter, runner, busser, bartender, and sommelier, that server will share tips with that team. Every restaurant is different.

The key is that the wait staff should keep an eye out for illegal activity. The stereotype is that the wait staff makes a lot of money and sometimes employers look for ways to skim money off of these tips. Servers should be careful to be sure that they’re receiving minimum wage for every hour worked in a workweek.

If a pattern emerges where wait staff is consistently being underpaid, legal options may be available. Of course, servers should try to sort out the pay issue before seeking legal aid. When nothing is done to rectify the issue, contact an employment lawyer.

Applying Legalese to the Restaurant Lingo

The U.S. Department of Labor (DOL) sets out specific language in whether or not tip-sharing is permitted between certain employees. A rule of thumb requires that those who share in tips have served the customer in some way, providing some sort of table service before or during the meal. DOL prefers that restaurants have a written tip-sharing policy that every employee acknowledges.

Restaurant Occupations Eligible for Tip Sharing

Tipping Rules Under the FLSA – The Red Robin Case

• servers
• bellhops
• counter personnel who serve customers
• bussers
• bartenders

Restaurant Occupations Not Eligible for Tip Sharing

• janitors
• dishwashers
• cooks
• laundry room attendants

Of course, DOL is quick to say that tipped employees may share their tips with whomever they so decide, including individuals who aren’t usually eligible for a tip out or tip pool. Tips are meant to be given freely.

Mandatory Service Charge

Everyone is familiar with the mandatory, large group service charge that restaurants slap onto groups. Although many customers believe this mandatory service charge is tip for the server, it is not. In fact, the restaurant can keep the mandatory service charge and not share any with the server.

However, the Internal Revenue Service has implemented new tax treatments to mandatory service charges, meaning that restaurants must treat any pay out of this sum as wages to the server rather than a tip. This change requires that the employer pays both Social Security and Medicare taxes on the funds given to servers. Some restaurants might see a benefit in no longer using the mandatory service charge.

Sue Your Employer For Wrong Tip

The wait staff at a restaurant is entitled to earn minimum wage for every hour worked in a workweek regardless of the tables waited on and the tips earned. If a server ends a shift without having made minimum wage per hour, the restaurant is required to pay the difference. A restaurant that fails to do so faces legal repercussions.

Lawsuit for Unpaid Wages

How to Sue Your Employer For Unpaid Wages

The wait staff of Del Posto filed a lawsuit against Mario Batali, complaining that they were not being paid a legal wage and gratuities were being withheld. Moreover, the servers claimed that managers violated state laws in how they pooled tips and distributed them. During banquets and other special events, the servers did not receive any of the service charge that customers paid. Batali settled the case with 5.25 million that was paid out to all staff who had served within a period of eight years. (Capsolas et al v. Pasta Resources Inc., 2011)

Illegally Paid Wait Staff Lawsuit

Three servers filed a class-action lawsuit against Daniel Boulud for allegedly paying them only five dollars per hour for non-tipped side work. This is clearly not minimum wage. Tipped employees were also expected to do menial work without receiving minimum wage. Furthermore, the employees claimed that the restaurant owner did not allow them to have tips for private events and did not pay overtime. Boulud settled the case at 1.4 million. (Roman et al v. The Dinex Group LLC et al, 2012)

Keep An Eye Out for Server Discrimination

Servers need to be aware of their employee rights. Managers and supervisors in the restaurant business often try to find creative ways to take a cut of the customer tips to waiters and waitresses. Meanwhile, some managers might discriminate against servers, placing them according to race or gender in more lucrative sets of tables. According to the law, these actions are illegal. Therefore, waiters and waitresses must know what is acceptable in the restaurant industry and what is not.

1. Familiarize yourself with Pennsylvania and local labor law.

2. Document conversations that seem discriminatory.

• ask other witnesses for their written testimony and contact information.
• analyze situations where unequal treatment occurs.

3. Watch out for these types of situations.

How to Recognize Discrimination

• Manager requires you to clock out before hitting overtime hours and expects you to move those hours to the following workweek.
• Sexual harassment from a table of customers occurs and management wants you to keep waiting on them.
• Managers and employers require a cut of your tips.
• National minimum wage goes up but the hourly server wage remains the same.
• While doing assigned tasks that are not serving tables, the server remains on the hourly server wage rather than receiving minimum wage.
• A manager makes derogatory remarks about your race, religion, sexual orientation, gender, age, or any other protected class.
• The restaurant chooses to hire only certain types of races for specific roles in the establishment.
• A manager keeps a server from filling out an injury report.

4. Complain to the manager, employer, or HR department.

5. Consult an employment lawyer.

If you are a server and have experienced employment discrimination of any type or illegal pay, contact a employment attorney now to hear your legal options.

Chat with a employment attorney: (412) 626-5626 or lawyer@lawkm.com.