Best Overtime Attorney Answer: Is an employer allowed to withhold tips? What if my employer requires I take cash payments under the table? If I work primarily for tips, do I still have to be paid overtime? How do I find the best wage employment attorney in Ohio?
Many restaurant owners, bosses and supervisors believe that the Fair Labor Standards Act (“FLSA”) does not apply to them because they employ “tipped workers.” This is simply not true. While the FLSA has a specific provision for providing a tip credit, which provides that
tipped employees must be paid at least $2.13 per hour. In doing so, the employer can use a tip credit of up to $5.12 an hour if the server earns at least the federal minimum wage in tips. To take advantage of the tip credit, restaurants must give the server written or oral notice of all of the following: (1) the amount the cash wage that it is paying, (2) the additional amount that the restaurant is claiming as a tip credit, (3) the tip credit being claimed by the restaurant cannot be more than the amount of tips that is really given to the server, and (4) all tips given to the server are either kept by the server or split pursuant to a valid tip pool. If the restaurant does not inform the server of all of these notices requirements, the restaurant is required by the FLSA to pay the server at least $7.25 per hour, and that server is allowed to keep all tips.
Critically, this “tip credit” does not mean that the rest of the FLSA provisions do not apply to restaurants. Restaurants still must pay overtime to its employees at time and a half – and only take the $5.12 credit off the minimum wage. Despite the fact that restaurant workers’ wages come primarily from tips, restaurant employers are still required by law to ensure employees are making at least $7.25 per hour and overtime and time and a half, which calculates to $10.875 per hour. To avoid this, many restaurants will try to pay servers cash under the table, but this is another no-no for all employers, including restaurants.
Because of a multitude of factors, restaurants are often hotbeds for wage and overtime violations. Whether it be the unusual hours, poor bookkeeping or a widespread misunderstanding of the rights that employees who are paid mostly in gratuity, restaurant workers are often victims of not getting paid according to law. A recent example of systematic pay violations at New York restaurants illustrated this growing issue.
The United States Department of Labor (“DOL”) reached agreements with seven New York restaurants to pay a total of nearly $1,700,000 to 363 low-wage workers and $115,000 in penalties to the Department of Labor. The workers in question were primarily servers and kitchen employees. As is often the case, these restaurants had a laundry list of wage and overtime violations that were discovered by Department of Labor investigations. The most prevalent violation across the seven restaurants was paying employees below the federal minimum wage.
The DOL also found extensive issues with the restaurants involving not paying overtime to employees. The fact that servers and other restaurant employees are paid primarily with tips does not exclude them from receiving overtime. Restaurant employers are still required to pay employees time and a half for every hour they work beyond 40 per week. In addition, the seven restaurants were cited by the DOL for paying cash to employees off-the-books, illegal tip pools, failing to pay wages to certain employees and not keeping records of hours worked and wages paid to employees. Thus, as the Department of Labor investigations discovered, restaurants continue to be a breeding ground for overtime and wage violations. Nothing in the way restaurants operate or pay their employees make them exempt from laws that ensure employees are compensated properly.
Are you a waiter, waitress, server at restaurant that depends on tips to live? If you are a tipped employee and believe that your employer is not paying you all of your wages for all of your lawfully earned time or taking part of your tips or participating in the tip pool as prohibited under the Federal Fair Labor Standards Act or Ohio Fair Labor Standards Act, contact the attorneys at The Spitz Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
The materials available at the top of this tipped wage violation, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Can my boss take my tips?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio wage attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.