We sue restaurants that steal wages and tips from waiters. Most waiters are paid $2.13 per hour plus tips. Waiters depend on restaurants to accurately count and distribute tips. Intentionally or accidentally, restaurants often shortchange or underpay waitstaff. Some of the most common violations our law firm sees are failing to pay minimum wage, miscalculating overtime, including cooks, owners, and kitchen workers in a tip pool, and holding waiters responsible walk tabs, breakage fees, and business expenses (like uniforms). When a restaurant underpays its waiters, a federal law called the Fair Labor Standards Act forces restaurant owners to pay up. Damages for even minor violations can be thousands of dollars.
Restaurants must guarantee waiters the minimum wage. Your combined wages and tips must exceed the minimum wage of $7.25 per hour.
Waiters are entitled to the minimum wage just like everyone else. This means that the base wage (usually $2.13 per hour) plus tips must equal the minimum wage. If your total pay (wages and tips) is less than the minimum wage, then your employer is breaking the law.
It is illegal to work just for tips. A restaurant breaks the law if it fails to pay an hourly wage of at least $2.13 per hour. If you are working solely for tips, then your employer is acting illegally. Anything less than $2.13 per hour is a violation of federal law and you are entitled to significant money damages.
Restaurants cannot shortchange waiters on overtime. The overtime wage for waiters is $5.76 per hour plus tips. If your restaurant is paying you $2.13, $3.20 or anything less than $5.76 per overtime hour, you are being illegally underpaid.
When waiters or servers work more than 40 hours a week, the restaurant must pay overtime. Waiters get overtime pay just like everyone else, for waiters this amount is usually $5.76 per hour. Some restaurants miscalculate overtime as $3.20 per hour (erroneously based on $2.13 times 1.5 = $3.20). But the overtime rate is not $3.20, it’s $5.76.
Similarly, a restaurant cannot allow waiters to work over 40 hours and continue to pay the same $2.13 for overtime work. Another illegal practice is to have waiters work only for tips when working more than 40 hours in a week.
Restaurants cannot use tips to pay cooks, kitchen workers, management, owners, or anyone not on your shift. A tip pool including any of these workers is illegal. “Tip outs” to any of these workers is illegal.
Waiters and servers are entitled to all of the tips they receive. There is a very narrow exception where a restaurant can distribute a portion of your tips within a valid tip pool. There are lots of rules for what is, and is not, a valid tip pool. For instance, tips can only be shared with other tipped employees. If a restaurant distributes tips to employees who do not regularly receive tips (cooks, janitors, dishwashers, managers, supervisors, owners, etc.) this is illegal. If a restaurant distributes or comingles tips between different shifts, this is an illegal tip pool. Of course, it is also a violation if management pockets your tips, fails to account for all tips, or otherwise fails to pay all tips out to waiters.
Keep an eye out for any employee who has little to no direct customer interaction receiving your tips! If your employer is distributing your tips to cooks, kitchen workers, management, or even tipped employees who are not on shift, then your employer is breaking the law.
Restaurants cannot use your tips for business expenses like broken plates and glasses, walked tabs, or uniforms.
Some restaurants will force waiters to pay for damaged items, walked tabs, or other business expenses. This is strictly illegal. A tipped employee must retain all of their tips. In other words, if your employer uses your tips to pay for broken plates and glasses, a breakage fee, a breakage pool, walked tabs, or stolen items, then the employer is in violation of the FLSA. Similarly, waiters cannot be required to pay for uniforms, tools, or job accessories out of their own pocket.
A credit or debit card processing fee is the only deduction that an employer may take from tips under the FLSA. Even then, the deduction must be no more than the actual processing fee charged by the credit card processor. You should be suspicious of any credit card processing fee of more than 2.9%.
Damages for mis-payment or underpayment of waiters are often thousands of dollars.
Why do restaurants have to pay waiters thousands of dollars for even minor errors? Restaurants are put in a position of power over waiters. Under the FLSA, we place tremendous trust in restaurants to be honest and competent in handling waiters’ tips. High damage awards, including punitive damages, are there to make sure restaurants play by the rules. Restaurants that follow the rules get the privilege of paying a very low wage of $2.13 per hour. Restaurants that break the rules must pay their workers extreme damages to compensate their employees and to dissuade future violations.
When a restaurant breaks the law, damages usually consist of paying $7.25 to the affected employee for all hours worked in the past two years. (A standard American work year is 2,000 hours!) Courts can increase this to three years and even double the amount as a punishment for intentional violations. Importantly, the restaurant must also pay the worker’s attorney fees.
We are experienced employment attorneys representing waiters.
If you are a waiter with concerns about your wages or tips, you should reach out to us for a free initial consultation. We represent waiters in legal disputes with their employers across Texas.