FAQ-TIPPED EMPLOYEE WAGES

Our law firm focuses on claims for unpaid wages.  If you worked as a server at a restaurant or bar, we would like a few minutes of your time to explain what we do and how we might be able to help you recover your wages if your employer violated the law. 

What is this about?

Under the Fair Labor Standards Act (the “FLSA”), all non-exempt employees who work in the United States must be paid minimum wage and overtime at a rate of one and one-half times their regular rate of pay.  Currently, federal minimum wage is $7.25 and overtime is $10.88 (1.5 x $7.25). 

However, employers are permitted to take advantage of a “tip credit” in order to meet their minimum wage and overtime wage requirements with respect to “tipped employees.”  The “tip credit privilege” allows for employers to take a MAXIMUM tip credit of $5.12 per hour.  That is, if you are tipped employee, your employer can count up to $5.12 of your tips per hour towards its obligation of paying minimum wage and overtime.    However,  restaurants and bars make mistakes, either intentionally or by not knowing the law, that   can make claiming a “tip credit” against an employee’s wages against the law. 

What are the common ways restaurants and bars violate the FLSA?

 There are a number of ways we have seen restaurants and bars take their employee’s tips and wages.  The following are among the most common:

• Requiring tipped employees to share tips with non-tipped employees.  Under certain conditions, an employer can require its employees to participate in a tip pool that distributes tips to other employees.  However, an employer cannot require a tipped employee to share his or her tips with an employee that works in a position that does not receive tips, such as back of the house workers like cooks or dishwashers.  It is also against the law to require a tipped employee to share tips with management or the owner of the bar or restaurant.
• Requiring tipped employees to pay for operating costs.  Bars and restaurants sometime require their tipped employees to bar for walked tabs or broken plates.  The law does not allow an employer to shift these costs of doing business onto its employees.
• Not paying any wages at all.  The least a tipped employee can be paid is $2.13 an hour.  Sometimes bars and restaurants do not even pay that and just have their employees working for tips.  This violates the law.
• Not paying for all hours worked.  You should be able to clock in as soon as you get to work and clock out right before you leave.  It is against the law to require tipped employees to work before they clock in or after they clock out.  Some bars and restaurants don’t let their employees clock in until their first customer arrives.  Others require their employees stay late rolling silverware or cleaning.  You should be getting paid for all the hours you actually work.

How much could I be entitled to?

Under the FLSA, an employee can recover unpaid wages, liquidated damages, attorneys’ fees, and cost.  An employer who violates the tip credit rules can no longer take advantage of counting the employees’ tips as part of its minimum wage and overtime obligations.  This means that if a court or jury finds that an employer violated the law, that employer must pay a full $7.25 per hour for every non-overtime hour worked and $10.88 for every overtime hour worked.  For example, if a waiter worked 40 hours during a week he or she was paid $85.20 (40 x $2.13), if a court finds that the employer violated the FLSA’s tip credit provision, it cannot take advantage of the tip credit privilege.  Accordingly, that employer should have paid $290 (40 x $7.25).  For this hypothetical week, the employer would owe approximately $204.80 ($290 they should have paid minus $85.20 they did pay).  Under the FLSA the employee may be entitled to liquidated damages, meaning you multiply how much the employee is entitled to in unpaid wages by two ($204.80 x 2 = $409.6).  Over the course of an entire year, an employer can owe thousands of dollars.

The statute of limitations is two years from the date that the employee joins a lawsuit and in some instances if the court or jury finds a willful violation, the statute of limitations is extended to three years.  For example, if an employee joins the lawsuit on September 1, 2020, then he or she can recover wages from September 1, 2018 to present (two years) or September 1, 2017 to present (three years).  If they worked prior to September 1, 2017, then with each day that passes they lose a day from their wage claim.  As such, to protect the full value of your claim, moving quickly is important.  However, nothing in this letter should imply that if you join this case you are guaranteed a recovery. 

How can I claim Unpaid Wages?

If you would like to begin the claim process, please sign the Consent Form and return it to our office via email, mail, or fax (281) 885-8813.  You can also fill out these forms online at: tippedwages.com/fileaclaim.  If you are interested in learning more about your rights, simply contact our office at 281-885-8844 or via email at bsosamorris@SMNLawFirm.com.   All initial consultations are free and confidential.

I am still employed.  Can I join?

It is illegal for your employer to take any action against you for joining a lawsuit for unpaid wages such as terminating your employment, reducing your hours, pay or benefits.   

How much do the Attorneys charge?

We will represent you on a contingency fee basis.  This means that if we do not recover anything for you, we do not charge you anything.  If we do get a recovery for you, we charge a percentage from the recovery.  Feel free to contact us with any questions.  

Contact Us with Your Questions