Wage Theft In the Industry: What To Watch Out For & How To Fight Back

So many people want my opinion on what to do when a restaurant owner or manager is cheating on the payroll. Very often, I hear about shady tip pools or having to do hours of sidework while only being paid $2.13 an hour. Since I’m just a bitchy waiter and know more about complaining and tequila, I asked an actual attorney to answer a few very important questions. I hope you all find this helpful.  -BW

Dealing with annoying customers can be stressful enough, but when your boss tries to screw you over with wage theft or overtime violations, that stress can reach a whole new level. If you’ve been in the industry for a long time, you know that while there are plenty of decent restaurant owners out there, there are also plenty of scumbags.

If you suspect that your employer has paid you unfairly, you might be unsure of what to do next. It’s normal to be unaware of how the law could protect you until you’ve already been denied fair pay. Fortunately, the law regarding fair wages is pretty clear and workers who have had their rights violated often have legal recourse against their employers.

Common Wage Violations

Most restaurant owners are honest and pay their employees fairly, but dishonest business practices are common enough that anyone working in the service industry should be aware of their workers’ rights. Some restaurant owners may bank on an employee being unaware that they’re effectively being stolen from. Some common forms of wage violations in the industry include:

Underpaying Employees For Side Work

If you’re a server but you regularly perform side work (folding napkins, polishing silverware, etc.), your employer has an obligation to pay you minimum wage for that time. That doesn’t mean the standard $2.13/hr base pay rate, but the federal minimum wage of $7.25/hr. This applies to tipped workers who spend more than 20% of their work hours performing side work.

Tip-Pooling For Non-Tipped Employees

Illegally pooling tips is one of the scummiest things a restaurant owner can do. Pooling tips is technically legal if they’re split between only tipped workers, but some restaurant owners decide to pool tips with other workers, such as BOH employees or even management. Not only is this a terrible way to run your restaurant and treat your staff, it’s also a violation of federal law.

This is basically a way for dirtbag restaurant owners to illegally subsidize part of their untipped worker’s wages at the expense of tipped workers – instead of just paying them a fair wage.

Failure To Pay Overtime Wages

If you work over 40 hours per week, you’re likely entitled to overtime wages. Some restaurant owners may calculate this rate incorrectly, either through ignorance or intentionally as a form of wage theft.

According to a federal law called the Fair Labor Standards Act (FLSA), the overtime pay rate is 1.5x an employee’s regular pay rate. This is not based off of the minimum $2.13/hr rate for servers, but the state’s minimum wage rate. So if you’re a server working in NYC and the minimum wage there is $13/hr, your overtime pay rate would be $19.50/hr.

What Should I Do If I’ve Been The Victim of Wage Theft?

Restaurant employees are protected by the Fair Labor Standards Act. This law sets legal requirements for tracking worker hours, overtime wages, tipped worker wages, and more. If you think your boss has been paying you unfairly, there are ways to fight back and recover what’s owed to you.

Talk To Your Employer

Not every case of unpaid wages is a case of intentional wage theft – some employers and managers are just absent-minded and make mistakes. It’s probably worth talking with your employer about the issue to see if it can be fixed. They may realize their mistake and reimburse you for the wages you’re owed.

File A Report With The Department of Labor

If discussing the situation with your employer doesn’t help and it seems like they’re not willing to give you your fair wages, then it might be time to file a report with the Department of Labor. You can do this at either the state or federal level.

These reports are confidential, so your name and the details of your complaint will be kept secret. However, there may be an exception if it’s necessary to reveal your identity (with your permission) during the investigation.

If your employer has in fact denied you fair pay, then the government will supervise payment of your back wages.

Consider Talking To An Employment Lawyer

You also have the option to file a civil lawsuit instead of filing a government complaint. Most employment lawyers offer free consultations, so you can figure out if you really need a lawyer over the phone without wasting any money.

Author Bio: Tim Becker Partner at Minneapolis’ Johnson // Becker PLLC, and lead sponsor of WageAdvocates.com. He is committed to providing clients effective, aggressive legal representation, and has prosecuted numerous individual FLSA violation claims.

6 thoughts on “Wage Theft In the Industry: What To Watch Out For & How To Fight Back

  1. Teresa Vetter

    What about a tip pool where the house keeps a portion? Our service charge is 20%, but the servers receive 16-17% of that. The management won’t tell the employees where the extra goes.

    Reply
  2. RogerG

    Teresa: Unless it going to the IRS or your state government as withheld income tax, it sure sounds fishy. And if it is going to taxes, it is pretty easy to document it on the employer’s part.

    On a related note, this happened at a well-know restaurant in Des Moines:

    “[The employer] forced workers to cash their paychecks and return the money to her. [Employees] also were required to pay $20 from their daily tips back to the restaurant. 
    After giving back cash from their paychecks and tips, workers’ wages consisted of their remaining tips.

    Reply
  3. Candace

    I’m in California working for a family owned business. Many of the servers as well as myself suspect that our boss is paying us unfairly. Our paychecks always vary but it is usually around 2-5 dollars an hour. Our boss claims that this is because our tips are getting taxed and if we have a problem we can take it up with her CPA. However, I have a feeling her and her cpa may have some shady deal going on together. Is this normal for other servers in California? I was under the impression that the laws in California stated that you must be paid minimum wage plus tips.

    Reply

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