TRUSSVILLE, Ala. — Waitresses of the Trussville Alabama Hooters filed a lawsuit that claim they were illegally required to “contribute a portion of their tip earnings to ‘Staff Guys’ who do not directly interact with customers.”
Although the Fair Labor Standards Act does permit employers to satisfy minimum wage laws, food servers cannot be compelled to share tips with other restaurant workers who do not “customarily and regularly receive tips.”
The servers claim they were compensated at a rate of $2.13 per hour, which meant Hooters was claiming a $5.12 per hour tip credit to satisfy the federal minimum wage requirements.
In addition to the waitresses’ claims regarding the illegal tip pooling, the waitresses also asserted that Hooters required them to arrive before 11:00 AM, when the restaurant opened, to perform non-tip-producing duties, such as: washing windows; wiping down tables, chairs, window ledges and baseboards; making tea which involved retrieving drink containers, tea bags, and sugar from the back and mixing them; setting up tables and server stations which involved filling table caddies with sugar, ketchup, mustard, and mayonnaise packets; stocking server stations with to-go bags, to-go cups, to-go silverware, napkins, paper towels, and any other supplies that would be needed throughout the day. The waitresses allege that a substantial amount of time, in excess of 20% of their working time, was spent performing non-tip-producing activities.
Within two months of filing the lawsuit, Hooters agreed to pay four current or former waitresses in excess of $20,000.00 to settle the lawsuit.
Tipped Employees vs. Non-Tipped Employees
Wage theft and compensation abuse in the restaurant industry is not new.
In July 2013, the U.S. Department of Labor’s Wage & Hour Division issued Fact Sheet #15, in which it alerted tipped employees of certain abuses prevalent in the service industry. In particular, the publication specifically condemns employer practices of not paying tipped employees all of their tips or requiring them to pool their tips with non-tipped employees:
- Retention of Tips: A tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.
- Tip Pooling: As noted above, the requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips. The FLSA does not impose a maximum contribution amount or percentage on valid mandatory tip pools. The employer, however, must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for the amount of tips each tipped employee ultimately receives, and may not retain any of the employees’ tips for any other purpose.
- Dual Jobs: When an employee is employed by one employer in both a tipped and a non-tipped occupation, such as an employee employed both as a maintenance person and a waitperson, the tip credit is available only for the hours spent by the employee in the tipped occupation. The FLSA permits an employer to take the tip credit for some time that the tipped employee spends in duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips. For example, a waitperson who spends some time cleaning and setting tables, making coffee, and occasionally washing dishes or glasses is considered to be engaged in a tipped occupation even though these duties are not tip producing. However, where a tipped employee spends a substantial amount of time (in excess of 20 percent in the workweek) performing related duties, no tip credit may be taken for the time spent in such duties.
Our attorneys are investigating claims of unlawful tip pooling and minimum wage violations at Hooters restaurants across the country. If you are or were a food server and believe you were the victim of an improper tip credit scheme or other minimum wage violation, please contact us today – the law gives you only a limited amount of time to seek damages and compensation.