Is Your Employer Violating The Law By Not Paying Gratuities Earned By You?
A few months ago we published a blog post about employees who are paid by the hour -- particularly low wage workers -- and who are often cheated by their employers. We pointed out that hourly workers are routinely denied proper overtime pay and are often paid less than minimum wage according to a newly released study based on a survey of workers in New York, Los Angeles and Chicago.
But what about workers who are not being paid their tips, even though their employers are charging customers a mandatory gratuity for various services? Unfortunately, many employees do not realize that they are entitled to receive all, or a significant portion, of gratuities charged by employers to their customers.
Indeed, there are millions of workers in the USA that rely on tips for most of their income, and there are well over two million businesses that rely on tipped employees. According to recent statistics from the U.S. Department of Labor, food and beverage service-related workers held 6.5 million jobs in 2000 alone. The U.S. Department of Labor estimates in a 2001 study that tips and gratuities may account for well over $5 billion per year being left on plates and tip trays and financed on credit cards.
But let's face facts. Relying on customers' tips for your income is tough. The average customer doesn't realize how difficult and hard the average waiter, waitress, hair dresser, concierge, cab driver, maitre de or bartender works for their money. Dealing with and satisfying the general public is one of the most demanding jobs around. Many, if not most, tipped employees have a tough time making ends meet.
So if your employer is withholding gratuities that you’ve earned, you may have a case under The Fair Labor Standards Act ("FLSA"). The Act mandates that gratuities earned by an employee but collected by an employer must be turned over to the hard working employee whom earned it. If your employer is not doing so, you may have a basis to file a class action suit to recoup the tips earned by you and all other workers at your work site. Employers who do not manage and properly account for the gratuities earned by their employees and who do not properly pay their employees tips that they have collected on behalf of their workers may in fact be violating the law.
If you believe that your employer is withholding gratuities that you’ve earned, please contact us to discuss your legal options.
