FORMER TRUSSVILLE HOOTERS SERVERS FILE CLASS ACTION SUIT OVER PAY
Two former Hooters servers at the Trussville location have filed a class action lawsuit against the owner over allegations that the restaurant violated the Fair Labor Standard Act. (Learn More. . . )
Generally employers are required to pay employees minimum wage for every hour worked up to 40 hours a week. Under section 203(m), employers are permitted to take advantage of a “tip credit” in order to meet the federal minimum wage requirements with respect to “tipped employees.” See 29 U.S.C. § 203(m)(1)-(2). A “tipped employee” is defined as “any employee engaged in an occupation in which he ‘customarily and regularly’ receives more than $30 a month in tips.” See 29 U.S.C. § 203(t
When the employer pays a server $2.13 per hour they are claiming a “tip credit” of $5.12 per hour. This tip credit amount is based on the difference between minimum wage $7.25 per hour and the $2.13 cash wage paid. Generally, the employer bears the burden of showing it is entitled to this tip credit. Unless the employer satisfies the burden of showing the applicability the tip credit, the employee is entitled to full minimum wage for every hour worked.
29 USC Section 203(m) sets forth the requirements employs must satisfy in order to lawfully claim the “tip credit” in partial satisfaction of the employer’s minimum wage obligation. First, the tip credit may only be claimed for qualified tipped employees; second, the employees must be informed of the provisions of § 203(m); and third, all tips received by the employees must be retained by them. emphasis added See 29 U.S.C. § 203(m). “Where an employer takes the tip credit in connection with a tip pooling arrangement, the application of the credit will only be valid so long as the pool includes only those employees who customarily and regularly receive tips. . . . The requirements of the tip credit are strictly construed even if . . . [plaintiffs] actually earned more than minimum wage for every shift they worked . . . .”
Garcia v. La Revise Assocs. LLC, No. 08-cv-9356, 2011 U.S. Dist. LEXIS 3325, 2011 WL 135009, at *5-6 (S.D.N.Y. Jan. 13, 2011) (internal quotation marks and citations omitted). “If tipped employees are required to participate in a tip pool with other employees who do not customarily receive tips, then the tip pool is invalid and the employer is not permitted to take a ‘tip credit.'” Ash v. Sambodromo, LLC, 676 F. Supp. 2d 1360, 1369, 2009 U.S. Dist. LEXIS 107184, 20-21 (S.D. Fla. 2009) citing Wajcman v. Investment Corp. of Palm Beach, 620 F. Supp. 2d 1353, 1356 n. 3 (S.D. Fla. 2009) (citing 29 U.S.C. § 203 (m)).
“In determining whether a participating employee is one who ‘customarily and regularly receives tips,’ courts . . . focus on whether the employee in question is ‘part of an occupation that customarily and regularly receives tips’ or whether they have more than ‘de minimis’ interaction with customers as part of their employment.” Id.; see also Kilgore v. Outback Steakhouse, 160 F.3d 294, 301 (6th Cir. 1998). “Where employees’ perform some duties that entail customer service and others that do not [as here], the employees’ level of direct customer interaction is critical to a determination of whether the employee may participate in a mandatory tip pooling arrangement.” Pedigo v. Austin Rumba, Inc., 722 F. Supp. 2d 714, 730 (W.D. Tex. 2010).
Santana v. RCSH Operations, 2012 U.S. Dist. LEXIS 17355, 6, 2012 WL 463822 (S.D. Fla. Feb. 13, 2012)
If the employer fails to meet these requirements, it is not eligible to claim the tip credit, and in such case, the employer must pay each employee the full minimum wage of $7.25 as required under 28 U.S.C.S. § 206. The plain language of 29 U.S.C.S §216 creates a private right of action against any employer who violates 29 U.S.C.S. § 206. Plaintiffs may be entitled to an equal amount in liquidated damages.
Meaning employers could have to pay $10.24 per hour for every hour worked by a server for a two to three year period under invalid tip pool share system. Each person’s damages are different and the period of recovery is based on the date they file a lawsuit. So if an employee files a lawsuit they can go back two year from that date and three if they can demonstrate the violation was willful.
For information related to tip pooling/tip-sharing lawsuits contact the firm by calling 205-314-0500 or by email