The Department of Labor regularly tells employees that a compulsory charge for service, for example, 15 percent of the bill, is not a tip. Such charges are part of the employer's gross receipts. Sums distributed to employees from service charges cannot be counted as tips received, but may be used to satisfy the employer's minimum wage and overtime obligations under the FLSA. If an employee receives tips in addition to the compulsory service charge, those tips may be considered in determining whether the employee is a tipped employee and in the application of the tip credit.
Another area where the Department of Labor gives advice to employees is pertaining to credit cards. The DOL tells waitresses, waiters and bartenders that where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA. However, this charge on the tip may not reduce the employee's wage below the required minimum wage. The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.
Can I require a server or bartender to clock out of work and require them to continue cleaning or closing?
This is another danger area for Florida restaurants. Waiters and waitresses are hearing that the restaurant may not make them work, in any way, off the clock. These servers and bartenders are hearing that restaurants sometimes are required to pay waitresses and waiters for NOT working. Of course, this usually gets servers pretty excited and this may invite unnecessary litigation for the restaurant industry. A favorite example used in Florida is when servers and bartenders hear that if a restaurant/bar gets slow, and the employer says, “hey, clock out and sit at a booth until it gets busy again (but you can’t leave), then clock back in once it gets busy,” then the restaurant is liable for a wage for that time. Servers also hear that a Florida restaurant may not make the server clock out before performing closing or cleaning duties. If you are unclear of what your rights are as a restaurant owner in Florida, contact us by email or calling the Law Office of David Miklas at 1-772-465-5111. We will explain your obligations under the law, and how to prevent these types of lawsuits, by ensuring that your Florida business is in compliance with the law.
Are these types of lawsuits considered class action lawsuits?
You may hear that some lawsuits have multiple employees because it costs the restaurant more money to settle. However, Florida restaurants are still being sued by single employees, one by one, which may result in your business having to pay more in attorneys' fees to litigate or otherwise resolve these cases. These type of laws are very favorable for the employee to recover their attorneys' fees if they sue a restaurant because if the restaurant is liable for any proven violations, then the lawyer representing the employees is usually entitled to a reasonable attorneys’ fee. This makes this type of lawsuit desirable. There is much confusion as to whether these are “class” actions or “collective” actions. Regardless, this waiters and waitresses are suing Florida restaurants because they want complete control over their claim and the decision to fight or settle their case.
What is minimum wage for a server in Florida?
Florida allows tipped employees to be paid $3.02 less than the applicable minimum wage by using the server’s tips as a “credit” toward their hourly wage. In 2019 the minimum wage in Florida is $8.45. Because the tip credit is $3.02 an hour, this means Florida employers may pay tipped employees as little as $5.44 an hour in 2019. Florida servers and bartenders are hearing that if this lower minimum wage plus the tips the employee actually earns don’t add up to at least the full state minimum wage, the employer must make up the difference. This type of “education” often pits servers against their employers in Florida.
Should a server be paid regular minimum wage during opening and closing duties?
This is a unique area that some Florida restaurants are unaware of. The law in this area is unsettled and until a restaurant fights these type of claims, it is likely that they will continue to be confronted by lawsuits, and demands and have to defend expensive lawsuits against our Florida restaurants. There is some guidance that the Department of Labor gave, which is not law, but which some people believe should be law. Florida servers and bartenders are taking the position that the DOL has taken the position that non-tipped, incidental labor (“restaurant side work”) may not exceed 20% of the server’s total shift time at a “server wage.” They often explain to each other servers that if side work in Florida exceeds 20% of their shift time, the restaurant must pay the server full minimum wage for that time. Your servers and bartenders are being told that if they are required to perform any duties that are generally unrelated to the job of a server/bartender (such as cooking, washing dishes, deep cleaning the restaurant, cleaning bathrooms, etc.), they are entitled to receive a full minimum wage regardless of whether that side work exceeds 20% of their shift. Many Florida employment lawyers believe that this is not a correct view of the law, but often times it is less expensive to just pay a portion of the money demanded by the employee, along with a lawyer’s fee to make the case go away rather than paying to defend against this litigation, which can drag on for a year or two. Until employers fight this type of lawsuit and obtain a ruling from a judge demonstrating that this type of claim for server side work or waitress side work is unfounded, some Florida restaurants will continue to receive demand letters and lawsuits. Of course, your Florida business should make certain that it is in compliance with the law so that you do not have to defend such a lawsuit, which may have validity.
What is an illegal tip pool?
Florida servers and bartenders are being told that an illegal tip pool is when a tipped employee is required to “tip out” some of their tips to a person that is not customarily engaged in a tipped occupation. Florida waiters and waitresses are hearing that this includes back-of-the-house staff (kitchen staff), management, the company itself, and in some cases, hosts/hostesses. Florida servers and bartenders are being told the following:
If you are forced to contribute to an illegal tip pool, you are entitled to be paid FULL MINIMUM WAGE for EVERY SHIFT where you were required to contribute to the illegal tip pool, PLUS return of the money you tipped out during these shifts.
This type of discussion often gets current and former servers excited about suing their restaurant. Rather than seeking clarification or having a discussion with the restaurant, these servers and bartenders are encouraged to sue the restaurant. Many restaurants feel this is unethical. At this time, it is permitted in Florida for servers and bartenders to sue their restaurants without first trying to discuss the matter or work things out. Our firm always tries to help restaurants keep costs low, including unnecessary legal expenses. Sometimes it makes sense to fight against a frivolous lawsuit, and sometimes it makes sense to settle early. We help guide employers to make the right decision for their situation. We do not often encourage employers to sue servers or bartenders, but sometimes it is necessary and we will vigorously litigate cases that have merit.
Is the manager allowed to take a server’s tips?
In Florida, servers are being told that in almost every situation, no. Usually, the only example that is given as an example of when this is permitted is when a server’s table included an auto-gratuity (usually due to it being a larger party), this may be withheld/kept by management. Other than this type of situation, your servers and bartenders are often being told that in order to know if the employer/manager was legally permitted to “take” their tips, they must speak with an attorney. Again, this often results in unnecessary litigation or threats, rather than amicable resolution.
How much will this type of lawsuit cost a Florida restaurant?
Servers and bartenders may hear that if they “are forced” to file a suit in order to recover the wages that are owed to the server or bartender, Florida law allows the server / bartender to recover the amount they are owed, PLUS liquidated damages equal to the amount they are owed, PLUS THEIR ATTORNEY EXPENSES! Some employees that sue restaurants for these types of cases demand that the Florida employer pay the wages owed, plus liquidated damages, plus a lot of money to the law firm who wrote the letter demanding a settlement. If a restaurant does not settle early, the restaurant has the option of litigating the matter or hoping that the matter goes away. Some of these matters will go away, but most will not.
What if the server or bartender doesn’t have their pay stubs?
Although helpful, it is not necessary for the waiter, waitress or bartender to have their pay stubs. Why? Because the restaurant is required by Federal law to save all your pay stubs and time records for a specific time period. If the restaurant has no payroll records, because it paid the waiter or waitress “under the table” this is a difficult case to defend and the employer often will have many more problems than simply repaying one worker for unpaid wages. If you have paid workers in Florida “under the table” you should promptly contact our law office to help you audit your pay practices and to correct any improper pay methods you may be using.
Am I allowed to pay a server a flat amount and expect he server to make up the rest of the money by tips?
Only if that “flat amount” does not break down to less than $3.02 under minimum wage for all the hours the server works.
Is a restaurant allowed to automatically deduct time from a waitress’s pay for breaks even if she didn’t take a break?
This is the type of situation where waitresses are being told “absolutely not” and told that they should sue. This is a nuanced topic and a restaurant should seek competent legal counsel if it is contemplating a pay practice that involved this type of arrangement.
Can a Florida restaurant require a waiter or waitress to be at work by a certain time but not allow the waiter or waitress to clock in? Is that legal?
Usually No. If you require a worker to be at work at a particular time, and they arrive at that time, they almost always must be paid for that time.
What if a waitress makes less than minimum wage even with her tips included?
This may happen if you have a slow shift or a poor quality waitress. Under the law, low quality waitresses must still be paid minimum wage, and this means that the employer must pay the difference between what the low quality waitress received in tips and pay and the required minimum wage. Often the way to handle such incompetence is to terminate low quality waitresses.
If I think I need help making sure that my restaurant is paying its waiters and waitresses properly, when should I call?
Immediately. The sooner you contact an attorney, the sooner you can start protecting your rights. Call us at 1-772-465-5111.
What if a waiter or waitress threatens to sue me and that waiter or waitress is still employed by the employer?
It is illegal for an employer to “retaliate” against a waiter or waitress in Florida for demanding the wages they believe that they are legally owed. If the employer does retaliate because a waiter or waitress demanded wages they are legally owed, they will be owed much more money, and the employer will also be forced to pay a lot of money in lawyers’ fees, both to defend it, and also for the lawyer who is representing the employee.
How does an employee calculate the 20% for the side work?
Waiters and waitresses across Florida have been hearing that the way to calculate this is “total hours spent performing side work per shift.”
What are waiters and waitresses hearing about suing Florida businesses?
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Do you own a restaurant? Have you received a letter from a lawyer representing a waitress or waiter or bartender that is threatening to sue you? We have seen an explosion of lawyers suing restaurants in Florida on behalf of servers and bartenders. These lawyers might tell your current and former servers and bartenders that they are protected by certain federal and state laws. These lawyers focus on the federal Fair Labor Standards Act (FLSA) and the Florida Minimum Wage Act. Guess what? These lawyers are usually correct! The FLSA requires employers to pay covered employees at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. These lawyers may also talk to your servers about Florida tip laws and Florida tip credit. You should educate yourselves so you can comply with the law.
What Is a “Tip Credit?”
Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. Employers must provide oral or written notice to tipped employees of the use of the tip credit in advance. 29 C.F.R. § 531.59(b). Employers using the tip credit must be able to show that tipped employees receive at least the minimum wage when direct wages and the tip credit amount are combined. If the employee’s tips combined with the direct wages do not equal the minimum wage, the employer must make up the difference during the pay period. Thus, the maximum tip credit that an employer can currently claim under the FLSA section 3(m) is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13). Under certain circumstances, an employer may be able to claim an additional overtime tip credit against its overtime obligations.
What is a Tip Pool?
The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors.
Retention of Tips in Florida: A tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA prohibits any arrangement between a Florida employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.
Tip Pooling in Florida:
Although a Florida employee must retain all tips, this does not prevent a Florida business from using a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips. The FLSA does not impose a maximum contribution amount or percentage on valid mandatory tip pools. The employer, however, must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for the amount of tips each tipped employee ultimately receives, and may not retain any of the employees' tips for any other purpose. These rules are important for a Florida business owner to follow because an employer who fails to provide the required information (notice to the employee) cannot use the section 3(m) tip credit and therefore must pay the tipped employee at least $7.25 per hour in wages and allow the tipped employee to keep all tips received.
Florida businesses are reminded that if they elect to use the tip credit provision, they must be able to show that tipped employees receive at least the minimum wage when direct (or cash) wages and the tip credit amount are combined. If an employee's tips combined with the employer's direct (or cash) wages of at least $2.13 per hour do not equal the minimum hourly wage of $7.25 per hour, the employer must make up the difference. This webpage has only been discussing the federal minimum wage, but Florida has a higher minimum wage, which would apply.
In Florida, when an employee is employed by one employer in both a tipped and a non-tipped occupation, such as an employee employed both as a maintenance person and a waitperson, the tip credit is available only for the hours spent by the employee in the tipped occupation. The FLSA permits an employer to take the tip credit for some time that the tipped employee spends in duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips. For example, a waitperson who spends some time cleaning and setting tables, making coffee, and occasionally washing dishes or glasses is considered to be engaged in a tipped occupation even though these duties are not tip producing. However, where a tipped employee spends a substantial amount of time (in excess of 20 percent in the workweek) performing related duties, no tip credit may be taken for the time spent in such duties. This area has become a favorite area for employee-side lawyers in Florida to focus on, so you should focus on compliance.
What is considered side work?
Servers and bartenders in Florida are hearing that “side work” is work that is related to the job of being a server/bartender, however does not produce tips from a specific table. Some restaurants are being sued or threatened with a lawsuit focusing on general tasks, such as brewing tea, brewing coffee, rolling silverware, sweeping up, putting bread in the warmer, replacing sweetener caddies, filling/marrying ketchup/condiments, wiping down counters, etc.
Basically, Florida servers are hearing that if they are doing work other than greeting their customer, taking the customer’s order, bringing the customer their food/accessories, or cashing out their table, it is probably side work. This is certainly something that you can fight in court, but it can be expensive. It is best to discuss this issue with an experienced employment lawyer who can assist your Florida business in setting up a proper pay system.
Why are waiters and waitresses suing Florida restaurants?
There is a collection of lawyers in Florida that are targeting employers by telling their wait staff and bartenders that if they are a tipped employee working under a "tip credit," their employer may not be paying them all the money that they deserve. The law firms in Florida that have made a cottage industry out of suing restaurants and “educating” waiters and waitresses by telling them that if they are working under a tip credit:
• The amount of tip credit cannot exceed actual tips received
• The employer must explain tip credit system to the tipped employee
• The employer cannot force the wait staff to tip out to non-tipped employees (management, cooks, cleaning crew, etc.)
• The waiter and waitress and bartender is owed a full minimum wage for all shifts where sidework exceeded 20% of their shift time.
The Florida law firms that target restaurants tell the waiters and waitresses and bartenders that they may be able to recover two times the amount of money owed to them. Bartenders and servers in Florida are hearing that Florida’s statute of limitations allows them to sue the restaurant and its owner personally for any server or bartender job they have had within the last five years! This may result in many former employees who may have not worked for you three or more years suing your Florida business! So, please comply with the wage laws.
If your Florida restaurant business has received a letter threatening a wage lawsuit you should contact an experienced labor & employment attorney, such as David Miklas, to schedule a free and confidential legal consultation regarding your rights as a restaurant owner. Call today at 1-772-465-5111.