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Restaurant servers fear theft of tips under proposed regulations

Existing wage regulations set by the U.S. Department of Labor allow servers in Texas restaurants to keep their tips and bar management from requiring tip sharing with kitchen staff. If a proposed change to the regulation becomes official, then restaurant owners will gain the ability to pool tips and distribute them between servers and cooks. Although some people in the food industry accept that this change could ease income disparity between front and back workers, the regulations as proposed leave open the possibility that management could keep the tip money.

The proposed regulation would give employers the option to forgo the tip credit that allows servers to be paid below minimum wage. After raising all employees to minimum wage, the restaurant owner could pool tips and distribute them or legally keep the money. The National Restaurant Association recognizes this issue but still supports the proposed regulatory changes without any adjustment to prevent management from keeping tips.

The senior counsel at the National Employment Law Project expressed serious concern about the potential of employers to pocket tip money. The restaurant industry has a poor record of paying employees appropriately. Lawsuits from employees are commonplace for issues such as wage theft, unpaid overtime and misappropriating tips. Small companies and large restaurant chains alike routinely settle legal complaints about wage and hour violations.

When tipped workers need answers about their legal rights, an attorney might provide clearer answers than an employer. A person consulting an attorney could potentially confirm that an employer has violated wage and hour laws. To pursue back pay, an attorney may be able to organize evidence about hours worked, payroll tax deductions and rate of pay and file the information with a court. With legal representation, a person might gain the leverage to pressure an employer into paying a settlement.

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