Workers in the
War on Wage Theft
According to the U.S. Department of Labor “a tip is the sole property of the tipped employee …. [Federal law] prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer.”
Waiters, bartenders and other tipped employees in the service industry survive on the tips that they earn. In fact, federal law permits employers to pay their tipped employees a minimum wage of only $2.13 per hour. The rationale for a substandard minimum wage is that when the service employee’s tips are included in their earnings, they will make at least the minimum wage. When employers do not earn at least minimum wage including their tips, the law requires that the employer make up the difference.
Employers steal wages and tips from tipped workers through a number of schemes including:
Attention Banquet Servers
Many banquet companies charge customers a 15-22% mandatory service charge to their customers’ bills. Rather than distribute those charges to the service staff, the employers often keep the money for themselves.
Several states including New York, recognize that these charges are gratuities belonging to the service staff, where a reasonable customer would interpret the charge as a gratuity. Employers who retain the service charges under those circumstances may be stealing thousands of dollars per event from their waitstaff employees.
Fortunately, New York has a six-year statute of limitations for these claims. This means that workers may be entitled to all of the tips that their employer stole from them during the last six years.
Many states have law that are more protective of tipped employees. For example, in New York and several other states, mandatory service charges may be treated as tips which must be paid to the service staff. In addition, many states have a higher tipped minimum wage. In New York, the tipped minimum wage is currently $7.50 per hour or more. Other states have no special minimum wage for tipped employees. Employers in those states are required to pay the service staff the full minimum wage under state law.
If you think you are a tipped employee who has been the victim of wage theft, contact the Marlborough Law Firm today for a free consultation.