Restaurants, clubs, and bars commonly employ tipped employees such as waiters, waitresses, servers, bussers, busboys, bartenders, and barbacks. Tipped employees are entitled to receive at least a minimum wage, but they often agree to get paid less than the minimum wage in exchange for receiving tips from customers. The law allows this, but the law in this area is very strict and very specific, and many employers don't follow the law. An employer who does not properly pay tipped employees can be required to pay the difference between the wage actually paid and the minimum wages or overtime wages owed, plus a penalty known as liquidated damages of an amount equal to the wages due, plus attorneys' fees.
My office routinely handles cases for tipped employees and is familiar with the many ways in which employers violate the law by following the strict regulations that apply.
Tipped employees can be paid $3.02 less than the minimum wage, but a tipped employee must be paid for all time worked, must be reimbursed for all employment-related expenses (uniforms, aprons, tools of the trade), and cannot be required to share tips with managers, supervisors, cleaners, or cooks. This means that if a manager, owner, or someone who doesn't interact with customers or works in a position that doesn't usually get tips, then the employer can't take the tip credit. For an employee, this means that you could get to recover $3.02 for every hour worked - which adds up very quickly! Employers also must ensure that tipped employees receive at least the minimum wage when you combine the "tip credit" wage (of $3.02 less than the minimum wage) with the tips received.
The current federal minimum wage is set at $7.25 per hour for each hour worked. The Florida minimum wage has exceeded the federal minimum wage since June 1, 2011. The 2014 Florida minimum wage was set at $7.93 per hour. The Florida minimum wage has since been set at $8.05 per hour since January 1, 2015.
Oftentimes, employers will make the mistake of paying the "tip credit" or reduced hourly wage for time spent in pre-shift meetings, for other mandatory meetings, and for excessive time spent doing side work. This is not legal. I also have seen employers require their employees to not only pay for their uniforms, but to also buy costumes for special occasions without reimbursing their employees. The problem with having employees pay for these things is that these expenses are deducted from the weekly wage and can result in a minimum wage violation.
Another type of mistake occurs with tip pools. Tip pools are only valid when they include non-managerial employees who have customer contact. Employers often violate tip pools when they include a manager or supervisor or someone who does not usually receive tips (such as a cook, chef, or cleaner). This is often referred to as "tipping out".
Employers have been known to violate the law when they pay a set amount for each shift worked, or by paying a set salary, regardless of the number of hours worked. This usually results in a tipped employee being paid too little - leading to a possible minimum wage or even an overtime wage claim.
Tipped employees also are entitled to receive overtime pay calculated at time and one-half times their regular rate of pay for all hours worked over 40 hours in a workweek.
Tipped employees in the hospitality industry are quite common. The way that the employees are paid can also be a problem, as many in the hospitality industry misclassify employees by paying them as independent contractors. This is a prevalent practice with exotic dancers, who are frequently paid as independent contractors - improperly.
The FairLaw Firm is familiar with how employers mistreat tipped employees. My office provides a FREE CONSULTATION and handles most cases on contingency, which means that we get paid only when you get paid. And the employer has to pay attorneys' fees! So, contact us now at (866) 281-9288 or at (305) 230-4884 to let us talk with you about your situation.