Levetown Law PLLC is investigating the tip pooling practices used by restaurants and restaurant chains to determine if they violate state and federal laws.
What is Levetown Law Investigating?
If your employer takes a portion of your tips and reallocates them to back of the house employees, they may be violating wage and hour laws and you may be entitled to significant damages set by state and federal laws designed to protect workers and to stop these unlawful practices.
For example, Levetown Law PLLC has discovered that many restaurants around the country require tipped employees to share their tips with kitchen staff, also known as back of-the-house employees. This unlawful practice appears to be especially prevalent in sushi restaurants. If true, this practice could violate state and federal laws.
Restaurants must also provide tipped employees with a detailed notice (called a “tip notice”) that is required by law.
What laws would this practice violate?
The Fair Labor Standards Act (the “FLSA”) permits employers to pay tipped employees a lower base hourly wage but only if their tips bring their total wage up to the minimum wage for each hour worked. This arrangement is known as a “tip credit.”
Under the FLSA, if an employer uses a tip credit, it cannot require tipped employees to share tips with kitchen staff. The Department of Labor has issued a summary of all tip credit requirements in Fact Sheet # 15, Tipped Employees Under the Fair Labor Standards Act.
What happens if an employer violates these requirements?
If an employer does not follow these requirements, it must pay tipped employees the full minimum wage and pay them the tips that were distributed to kitchen staff. Additionally, the employer generally must pay an additional equal amount as liquidated damages plus reasonable attorney’s fees. 29 U.S.C. § 216(b). In other words, the employer must generally pay two times back wages.
What if state wage and hour laws are more favorable to the employee?
If state wage and hour laws are more favorable to the employee, the state laws must be followed.
For example, an employer violating certain state laws must pay the employee three or four times back wages owed as a penalty for failing to provide the required notice of a tip credit and/or for including ineligible, non-tipped employees in tip pools.
What can I do if my employer is violating the law?
If you believe your employer is violating any of these provisions (for example, by failing to provide the required tip notice or including kitchen staff in a tip pool), you may be entitled to significant compensation.