Thousands of employees across the service industry in Ohio earn tips. But many tipped employees may not know their rights concerning pay or what to do if they aren’t paid correctly. Sadly, tipped workers and restaurant employees are frequent victims of wage theft.
Here’s what you need to know if you are a restaurant worker or an employee who receives tips in Ohio.
Ohio Minimum Wage Laws
Ohio’s current minimum wage is $9.30 per hour for non-tipped employees. While the federal minimum wage is $7.25 per hour, workers in Ohio are entitled to the higher wage of the state.
The federal government defines tipped employees as any worker who “customarily and regularly receives” over $30 per month in tips. Employers can pay tipped employees below minimum wage by counting employees’ tips as a credit toward the company’s wage obligation. Federal law permits companies to claim a tip credit of up to $5.21 per hour, and Ohio law permits a tip credit of up to 50% of the full minimum wage.
If order to claim this tip credit, however, employers must meet several requirements.
First, employers must inform its tipped employees in advance of the employer’s use of the tip credit of the provisions of section 3(m)(2)(A) of the FLSA.
Second, employers must inform the tipped employee of the cash wage that is to be paid to them.
Third, employers must inform the employee of the tip credit amount they intended to claim from the employee’s wages, which amount may not exceed the value of the tips actually received by the employee.
Fourth, the employer must inform the employee that all tips received by the tipped employee must be retained by the employee except for a tip pooling arrangement limited to employees who customarily and regularly receive tips.
And fifth, the employer must inform the employee that the tip credit shall not apply to any employee who has not been informed of these requirements taking a tip credit.
The most common type of tipped employee wage violation involves a situation where the company requires employees to share tips with management or with the restaurant itself, either directly or indirectly.
Your employer may require you and your coworkers to pool tips together. This is allowed in many states, including Ohio, but there are a few rules your employer must follow under the Fair Labor Standards Act.
Neither your employer, nor any company managers or supervisors, are allowed keep your tips for themselves under any circumstances.
Some employees work dual jobs for the same employer in both a tipped and non-tipped occupation. For example, delivery drivers are paid a tipped wage when making deliveries, but they should receive full minimum wage for any non-tipped work they do inside the store, such as cleaning, helping customers in the store, or making orders.
If you work in “dual jobs,” your employer is only permitted to pay you a tipped wage during the hours you are working in a “tipped capacity,” i.e., where the work you are performing is generating tips from customers. If you are working in a non-tipped capacity, you should be paid full minimum wage.
This issues often arises when restaurant employees are required to perform “side work,” i.e., various tasks not involving direct customer interaction. If the task is “related’ to the tip-producing activity, then the employee can be paid a tipped wage for the time it takes to complete the task. But, if the task is not related to the tip-producing activity, then the employer cannot claim a tip credit.
For example, if a server at a diner has to make a new pot of coffee, that might be considered “related” to the tip-producing tasks she is performing. On the other hand, if the server is required to stay after the restaurant is closed to mop the floor, that task is likely considered “unrelated,” and therefore the employee must be paid full minimum wage for those hours.
Dual job workers are often the target of wage theft by employers who attempt to pay employees the lower tipped wage for hours they should receive the regular minimum wage.
Overtime for Restaurant Workers & Tipped Employees
Workers in Ohio are entitled to overtime pay of at least one and a half times their regular rate if they work more than 40 hours per week.
This also applies to tipped employees. But calculating overtime for tipped employees is more complicated than it seems.
To claim a tip credit from the overtime wages of a tipped employee, the employer must first multiple the “regular rate” of full minimum wage by 1.5×, and then reduce the wage by the claimed tip credit amount.
For example, under federal law, an employer can claim a tip credit up to $5.12 per hour. The math works like this for overtime:
$7.25 × 1.5 = $10.88
$10.88 – $5.12 = $5.76 OT rate
As such, an employer claiming the full federal tip credit would have to pay $5.76 for overtime hours.
Under Ohio law, the math is a bit easier.
$9.30 × 1.5 = $13.95
$13.95 – $4.65 = $9.30 OT rate
What to Do If You Received Unfair Wages
Wage theft most often takes the form of employers paying workers less than minimum wage or failing to pay overtime. You deserve to be paid fairly and in full for every hour you work.
If your paycheck doesn’t accurately reflect your time spent working or amounts to less than minimum wage, you can file a minimum wage complaint with the Ohio Bureau of Wage and Hour Administration.
How Long Do I Have to Report a Pay Violation?
Under the FLSA, you have at least two years from the date of the violation to file your case. Under Ohio law, you have three years from the date of a minimum wage violation to file your case, and two years from the date of an overtime violation to file your case. You can file a complaint even if you still work for the same employer. Your employer is prohibited from retaliating against you for doing so.
Biller & Kimble, LLC Fights for Tipped Workers’ Rights
If you are a restaurant worker or tipped employee and believe you are owed back pay, a wage and hour violation attorney at Biller & Kimble, LLC may be able to help you file a complaint or a lawsuit against your employer.
We have extensive experience advocating for restaurant employees and tipped workers in the courtroom and would be happy to review the details of your case with you.