Improper Tip Pooling Leads To Significant Wage And Hour Lawsuit

February 20, 2014

Recently, a popular sports bar chain agreed to pay millions of dollars to settle a wage and hour claim. The back wage lawsuit arose as the result of the bar’s improperly withholding tips from waiters and bartenders. Additionally, the lawsuit alleged that “Chickie’s & Pete’s,” violated minimum wage and overtime pay laws.

Overtime pay and minimum wage laws provided by federal law in the Fair Labor Standards Act (FLSA) may be confusing. If you have questions about your pay and whether you are receiving all the compensation you deserve, it is a good idea to consult with an experienced Atlanta wage and hour attorney right away. Often, if you have been deprived all the wages you deserve, other employees may have been denied appropriate pay as well. A knowledgeable Atlanta wage and hour lawyer can begin an investigation into your situation and provide you important advice concerning your next steps.

In the recent case – 1159 restaurant workers asserted that the sports bar violated the FLSA in several different ways. First, the chain allegedly violated rules relating to tips credits. In fact, this was one of the largest cases ever brought based on violations of tip laws. Currently, federal law requires that restaurant owners pay tipped employees a minimum of $2.13 an hour. This plus tips must equal federal minimum wage ($7.25). If an employee’s wages don’t equal minimum wage, the restaurant is legally required to contribute enough to make up the difference. Here, the lawsuit alleged that Chickie’s & Pete’s failed to meet the minimum wage requirements, sometimes not paying the initial $2.13 an hour and often not adding in the additional pay required to meet minimum wage. Also, the lawsuit claimed that the bar also failed to pay the workers time and a half when they put in more than 40 hours in a workweek.

An investigation determined that even though federal law bars employers and managers from taking any portion of a waiter’s tips, waiters were typically improperly required to contribute between two and four percent of their sales to a tip pool. According to the Department of Labor, the owner illegally kept close to 60 percent of the tip pool, and required employees to ay the manager in cash at the end of each shift.

The labor department also found additional labor law violations, including failed to pay employees for time spent in mandatory meetings and training and illegally required employees to pay for uniforms.

For more information about tip wages or other wage and hour law, please contact the experienced Georgia wage and hour attorneys at The Buckley Law Firm, LLC for an immediate consultation.