U.S. Department of Labor Continues Crackdown On Restaurants

The U.S. Department of Labor, Wage and Hour division, has continued its recent crackdown on the restaurant industry and its compliance with the Fair Labor Standards Act – the federal law governing wage-hour pay and tip issues. For example, last month a restaurant settled a case where restaurant workers received more than $115,000 in owed wages for overtime violations. In addition, the Department of Labor is requiring strict employer compliance with the notice requirements of the tip credit rules under the Fair Labor Standards Act.  The Department of Labor requires that employers provide tipped employees with notice of:

1.  The cash wage that the employer is paying to the tipped employee.
2. The amount by which the wage of the tipped employee is increased on account of the tip credit claimed by the employer.
3. That all tips received by the tipped employee must be retained by the employee except for valid tip pool arrangements limited to employees who customarily and regularly receive tips.
4. That the tip credit will not apply to any employee who has not been informed of these requirements.

Therefore, you as a restaurant employee could be entitled to a significant amount of back wages if you were never informed of the above four items. Tip pools are also usually permissible under Federal law, but tip pool participants cannot be management employees, dishwashers, managers or chefs.  Some states prohibit tip pooling entirely.   Restaurant employees should be cautious about any kind of tip pooling arrangement they are required to enter into and should not be hesitant to ask questions if they do not understand the amount they are being paid. Know what your rights are. If you believe you are owed wages, overtime, tips, call the lawyers at Lebau & Neuworth, LLC.