Tips for Restaurant and Service Industry Workers

All too frequently service industry employees are cheated out of their wages. Employers such as caterers, restaurants, and banquet facilities may charge customers a mandatory service charge, gratuity, or tip, but then don’t distribute the service charge to the service employees that earned it. Also some employers may steal the tips from their employees — such as waiters & waitresses, hosts & hostesses bartenders, bellhops, skycaps & redcaps, hairdressers & barbers, nail salon workers, or exotic dancers.

Workers’ wages are suppressed and illegally reduced when employers or supervisors keep part or even all of the gratuity that the customer intended for the employee. For example, some restaurants and hotels include a mandatory 15% or 20% service charge or gratuity for food service, but distribute only part (or none) of the gratuity to the food servers. Court decisions have held that failure to turn over the entire amount of the tip or service charge to non-supervisory workers invalidates the employer’s claim for a “tip credit” against the current minimum wage. Thus many workers who receive only the federal minimum wage of $2.13 per hour (with the remainder of their wages in tips) are due an additional $5.12 per hour worked, plus an equal amount of liquidated damages, plus the stolen tips.

Tip pooling among non-supervisory workers is permissible, but if a supervisor or owner takes a cut of the tip pool, the employee must be paid at least the current state or federal minimum wage per hour.

If you work in this industry and would like to speak with us about whether you were paid all wages you were owed, please send us the information needed by filling out the Industry Inquiry form.

If you work in this industry and would like to speak with us about whether you were paid all wages you were owed, please send us the information needed by filling out the Industry Inquiry form.

Industry Inquiry