In my labor and employment practice, one big red flag for me is that a restaurant or bar is violating the Fair Labor Standards Act (FLSA) is requiring their wait staff or bartenders to pay for uniforms. It could be an apron, a shirt, or a pair of tights.
Why requiring waiters and bartenders to pay for uniform is illegal.
Whether they are called waiters, waitresses, bartenders, or Hooters Girls, tipped employees are workers who are paid less than minimum wage. The minimum wage is $7.25 an hour. The Fair Labor Standards Act (FLSA) requires all restaurants and bars to pay employees a minimum wage, which is currently $7.25 per hour. See 29 U.S.C. § 206(a)(1). This sounds familiar, right?
What is a Tip Credit and why does it matter?
The FLSA contains an exception that permits restaurants and bars to pay waitstaff and bartender less than the general minimum wage of at least $2.13 per hour -to a ‘tipped employee’ as long as the employee’s tips make up the difference between the $2.13 minimum wage and the general minimum wage.” One of my restaurant cases that went on to the Federal Court of Appeal made this point very clear. Montano v. Montrose Rest. Assocs., Inc., 800 F.3d 186, 188 (5th Cir. 2015) (citing 29 U.S.C. § 203(m)).
This is called a “tip credit, ” this is a narrow exception to the minimum wage and is a privilege for employers. If an employer gets sued for minimum wage violation, it is their burden of proof to establish that (1) they informed the tipped employees of the provisions contained in § 203(m); and (2) the tipped employees retain all of their tips.
Requirement number (1) is hard for many employers because they don’t even know what section 203(m) of the FLSA says. How are they going to notify their workers if they don’t even know the letters of the law?
The second requirement is really easy. Don’t take tips from your waiters and bartenders. An employer may not keep tips received by its employees for any purposes, ” Section 203
Why this matters is if the restaurant or bar violates the tip credit, the FLSA requires that they go back and pay every bartender, waiter, waitress, or waitstaff, $5.12 an hour for every hour they worked in the last 2 to 3 years.
Hands off the tips
Requiring a tipped employee like a waiter or bartender to purchase a uniform is an absolute no-no. A typical scenario is that the waiter or waitress gets their uniform dirty in the middle of a shift. Maybe they spilled food on themselves or were required to spray off some plates and got splatters. Rather than send the worker home, some restaurants or bars may require the worker to buy a fresh change of uniform. This is a FLSA violaiton. The reason is that the bartender or waitress would have to use their own money, presumably cash tips, to pay for the uniform.
Remember, if a restaurant or bar can’t deduct tips for uniforms, they can’t give tip money to managers either.
Don’t bankroll your operation or kitchen staff with tip money
The FLSA does not prohibit the pooling of tips among employees who customarily and regularly receive tips.” 29 U.S.C. § 203(m)(2)(A)-(B). This means people who work in the “front of the house” serving customers and not the kitchen workers. Tip pooling is not allowed, and the tip credit cannot be claimed, if “an employee is required to share tips with an employee who does not customarily and regularly receive tips.” Montano, 800 F.3d at 189. My Montano case was a lawsuit against Tony’s Restaurant in Houston. It was one of those fancy restaurants that had a person who worked exclusively in the kitchen making coffee. The restaurant required the waiters to tip out to the coffee man in the kitchen. You can’t do this because kitchen workers do not interact with the customers and are not typically tipped. When was the last time you dined at a restaurant or a bar and were so impressed with the fries that you added tips for the fry cook? Never right? That’s the whole point of the FLSA that says restaurants can’t use tips earned by waiters or bartenders to pay wages for the kitchen workers.
