Wage theft is sadly common in the restaurant industry and made worse by the COVID-19 pandemic, with workers being pressured into overtime and missing breaks while short-staffed.
While the federal government aims to step up enforcement of wage and hour violations, service and restaurant workers should know how to identify wage theft and how to report it. In most cases, it is best to call an attorney to handle your wage theft claim.
What Is Wage Theft?
The Economic Policy Institute defines wage theft as the failure to pay workers the full wages to which they are legally entitled. This can happen when workers don’t receive their wages or other benefits such as meal or rest breaks.
Workers may not even know they’re being cheated, or employers might not realize their actions are illegal. Wage theft can happen in companies of any size and industry but is rampant in tip-driven establishments such as restaurants.
How to Recognize Wage Theft in Restaurants
Wage theft can take several forms. Here are the most common kinds of wage theft in restaurants and ways to recognize them:
Working off the Clock
If your employer pressures you to come in before your scheduled shift, stay late, or work through your breaks, they may be trying to squeeze additional work out of you without paying.
You should be compensated for every hour you work — keep track of your time accordingly. Missed breaks and extra time spent cleaning or prepping can result in hundreds of missing dollars from your paychecks.
Payroll errors can happen, so you shouldn’t always assume the worst if your paycheck isn’t what you expected. But if your pay is consistently off, it could be a sign your employer is trying to catch you unaware.
Pay close attention to your checks and approach your employer quickly if you notice something wrong.
Paychecks Fail to Meet Minimum Wage
According to the Fair Labor Standards Act (FLSA), your pay should always meet or exceed the federal, state, or local minimum wage: whichever is highest.
For tipped employees, the FLSA states that any tips plus a base wage of at least $2.13 per hour must total or surpass the federal minimum wage of $7.25 per hour for nonexempt employees.
If a tipped employee’s hourly pay doesn’t come out to at least $7.25 per hour (or more if the state or local minimum wage is higher), the employer must make up the difference. But if employers skim tips or underpay on hours, employees can be cheated out of their correct wages.
It is surprisingly common for employers to include non-tipped workers (like managers) in an employee tip pool or tip sharing arrangement. If your employer either directly keeps your tips or requires you share them with tipped workers, the company is likely violating the law.
Pop quiz: if you are a tipped worker and your hourly base rate is $2.13 per hour, what is your overtime rate? If you don’t know, you are not alone. We routinely find employers get this wrong. Your overtime rate is one-and-a-half times full minimum wage, not the tipped wage rate. Thus, your overtime rate under federal law is $5.76, not $3.20. State laws may make this even higher.
Employers are only allowed to pay you a tipped wage rate if you are working in a tipped capacity. Many restaurants, however, required tipped workers to perform non-tipped duties (often cleaning). If your employer requires you to do enough of this type of work or work that is unrelated to your tipped duties, they need to pay you the non-tipped wage rate. After all, you cannot be earning tips if you are washing the windows.
What if You Suspect Wage Theft?
If you suspect you’re a victim of wage theft, you should first talk to your employer. If your boss won’t help resolve the issue, escalate your complaint to a higher-up in the restaurant or human resources representative.
Document the conversations to keep a record of your concerns and attempted communication. If you still experience issues, you can seek help from state and federal organizations outside the restaurant.
You can submit a complaint to your state’s Labor Office. Some states receive complaints through their Department of Labor, while others must be submitted through the attorney general’s office. Consult the U.S. Department of Labor’s State Office page to find the contact information for your local authority.
Your state’s office may be able to deal with your complaint more quickly than the federal government, but you also have the option to file with the U.S. Department of Labor.
Like the process at the state level, you’ll need personal information and documentation of the issue to submit your complaint to the DOL Wage and Hour Division.
Filing a complaint is free and confidential. Your identity will not be revealed unless you give permission, and it is necessary to pursue an allegation or court order. You can read more about how the DOL investigates complaints here.
Time Limits for Filing a Complaint
If you leave an employer but believe you are owed back wages, you have two years to file to receive your fair pay. However, the DOL recommends filing a complaint as soon as possible if you realize you’re missing income, even if you still work for the employer.
Biller & Kimble Fights Wage Theft
Whether you want to submit a wage theft complaint or are considering a lawsuit against your employer, a wage and hour attorney at Biller & Kimble may be able to help. We focus on fighting for restaurant workers’ rights and have a record of victories recovering back pay for wronged employees.
If you wish to file a complaint or have questions, we’re here for you. Contact us at (513) 202-0710 or reach out online.