3 Ways Restaurants & Delivery Services Cheat Tipped Employees

A shocking number of employees who receive tips get cheated by their employers.  How?  It happens in many ways, but there are three scams often used by employers, especially in the food service and delivery industries.

Here they are.

#1  Forcing Tipped Employees to Share Tips with Manager.

The most common violation occurs when managers demand a share of the tips.  Managers are forbidden from taking a share of the tips if the tipped employees are being paid the tip wage, currently $2.13 hourly.  (This rule does not apply if the employer is paying tipped employees the full $7.25 minimum wage.  In that situation, the employer can share in or even keep the tips.  I know of some employers who put tip jars near the register to mislead customers into thinking the workers will get the money.  As slimy as this practice is, it is legal if the employees are being paid the full minimum wage.  The rule against manager participation in tips only applies where the employees are receiving the much lower tip wage.)

#2 Forcing Employees Who Receive the $2.13 Tip Wage To Spend More than 20% of their Time Doing Non-Tip Work

When an employee is employed in both a tipped and a non-tipped position, the employee is considered employed in “dual occupations.”  In these situations, the employer may not pay the $2.13 tip wage if the employee is spending more than 20% of her or his time performing unrelated non-tip work.   Some dishonest employers will hire an employee and pay the tip wage but then use the employee to perform other tasks away from the tip-producing duties.  This is simply a way of underpaying the worker.

#3 Failing to Tell Tipped Employees That Their Tips Count Toward the Federal Minimum Wage

The law requires employers to tell workers their hourly wage and how it is being earned and paid.  This strict obligation makes sure employers don’t mislead employees about their earnings.  Some unscrupulous employers actually don’t tell new employees how they are being paid.  As surprising as it may sound, some workers – especially those who have been unemployed for long periods – are so desperate for work that they don’t press for details on the pay.  They’re just happy to have a job.  Unfortunately, these employees are ripe for being cheated.  Employers need not sit employees down for a seminar on federal wage and hour law, but they must tell tipped employees of their plan to pay the $2.13 tip wage and then to apply tips to help the employee earn the full $7.25 minimum wage.  This information requirement allows employees to hold their employers accountable if the employer fails to properly pay them.

Sound Like You’re Being Ripped Off?

If you are a tipped employee and are experiencing any of these violations, you should speak to an expert in employee rights immediately. And here’s how to do it: First, find a lawyer who specializes in employment law. You don’t want billboard lawyers who advertise for employment cases one day, dog bite cases another, and hurricane cases the next. Employment law is complex and requires great expertise. Lawyers who try to handle everything under the sun may make critical errors in your case. Second, find a lawyer who only represents employees. There are some nice people who represent employers, but they probably won’t see an employer-employee dispute from your perspective.  Get someone committed to the rights of workers.  Third, find a lawyer who handles cases on a contingency basis. That means they don’t get paid unless they win for you.

Good luck.

Jim Garrity

Representing Employees Only in Florida & Georgia

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Categories: Restaurant DIscrimination, Tip Credits, Tipped Employees, Unpaid Wages, Wage & Hour/Overtime

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