Legal Center for Restaurant Employees

Common Violations

Most waiters and waitresses are paid a subminimum wage rate. Restaurants are allowed to pay waiters and waitresses who earn tips as part of their job a subminimum hourly rate. However, an employer or restaurant is only allowed to pay waiters and waitresses this subminimum hourly rate if it complies with the federal law known as the Fair Labor Standards Act (FLSA) and satisfies this federal law’s very specific requirements. This only makes sense; if a restaurant is going to get the benefit of paying waiters and waitresses less than minimum wage, then a restaurant should only be able to do so if it complies with all the legal requirements of the very law that is being utilized.

Most Common Violations of Federal Tip Laws

The following is list of some of the most frequent violations we see restaurants committing – taking advantage of waiters and waitresses and engaging in illegal tip theft.

Illegal Tip Pools

Tip pooling is a fairly common practice in the service industry. Employees combine a certain percentage of their tips with that of their coworkers, and all the tips that are “pooled” are then distributed among employees who interact with customers.  While not all of the participants in the tip pool need to earn tips directly from customers, all of the participants must be in some way involved in serving customers. The restaurant owner, managers, supervisors, cooks, chefs, dishwashers, or any kitchen staff cannot be included in a tip pool.

If the restaurant you work for distributes pooled tips to the owners, managers, supervisors, cooks, chefs, dishwashers, back-of-the-house, kitchen staff, or others who do not directly interface with customers, this is considered to be an illegal tip pool and you may be entitled to the full minimum wage for all of the hours that you worked, all of the tips that you contributed to the pool, and possibly even more money. We can help you figure out if ineligible employees are a part of your company’s tip pool, or if the restaurant owners and managers are failing to properly distribute all pooled tip money, and if you may be entitled to damages.

Failure to Remit All Tips Earned

Tips belong solely to the server and the employer may not share or skim from a server’s tips. If you have noticed that you are not receiving the full amount of the tips that customers are leaving, then your employer may be illegally skimming from your tips. If you are unsure, one thing you should do is track the amount of tips you receive on each check on a personal notepad and check these amounts against the amount of tips the restaurant actually allows you to take home. You can also contact one of our experienced tip theft attorneys for consultation and advice.

Walked Tabs or Cash Shortages

What’s worse than getting stiffed on a tip? Getting stiffed on a tab. Have you ever worked in a restaurant where they had a policy requiring waiters and waitresses to pay for tabs when a customer left without paying? How about where you were required to pay for cash shortages? If you have ever worked for an employer where either of these things occurred, not only were you a victim of tip theft, but your employer is likely in violation of the federal tipping laws.

We have successfully sued large corporate restaurants who had an illegal policy or practice of making their waiters and waitresses pay for walked tabs or cash shortage.

Paying for Credit Card Processing Fees

An employer may deduct the actual cost to process a credit card tip, but nothing more. To illustrate, we successfully represented a group of servers in obtaining a sizable settlement against a restaurant that was deducting a 5% credit card processing fee for tips; however, as it turns out, the restaurant’s credit card processing fee was only 3%. This extra deduction resulted in a large settlement to our clients. Here is another case, where we obtained a sizable settlement on behalf of a group of waiters and waitresses that were claiming improper credit card deductions.

Paying for Uniforms

An employer may not charge an employee for a uniform or make an employee purchase a mandatory uniform. Simply put, if your employer has a mandatory uniform requirement, the employer must pay for the uniform.

Paying for Meals

An employer can only charge a waiter or waitress for the actual cost of the meal, and no more. If your employer charges you the full menu price for meals during your shift, the employer is violating federal wage law.

Paying for Equipment

An employer may not pass along its cost of doing business to tipped employees, which is true even if an employee authorized the employer to make the deduction. Ultimately, whether the deduction is improper or proper is a question that can only be deciphered with legal consultation with one of the wage attorneys at Herrmann Law.

Other Deductions/Fees

Employers will oftentimes attempt to disguise an unlawful deduction as an advance or a loan to an employee. Take for example, a deduction for damage due to a workplace accident, such as, a cash register shortage due to user error, accidentally breaking glassware, wrong ordered food, getting into a vehicle accident while at work, and any other deduction that is a “cost of doing business.”

Excessive Side Work

Waiters and waitresses may not be compensated at the subminimum hourly rate of pay (i.e. $2.13 per hour) if the employee spends more than 20% of their day performing or completing side-work (i.e. non-tip producing work incidental/related to tip producing duties). Further, an employer must pay the full minimum wage to waiters and waitresses who perform non-tipped producing work – regardless of how much time the employee spends performing the non-tip producing work.

Legal Center for Restaurant Employees

Some Real-Life Examples of Restaurants Committing the Above Violations:

We have seen numerous examples of restaurants and other service-related businesses illegally charging waiters and waitresses and illegally retaining tips. The following are just a few examples of instances where employers were violating the laws by engaging in illegal tip theft:

  • Restaurants illegally charging waiters and waitresses $1 per shift for a “glass-breakage fee” to cover the costs of replacing broken cups and plates.
  • Restaurants illegally requiring bartenders to pay for any cash register shortages at the end of each shift.
  • Numerous examples of restaurants and other service related businesses illegally charging employees for uniforms.
  • Restaurants illegally charging waiters and waitresses for cash shortages at the end of each shift.
  • Restaurants illegally charging waiters and waitresses credit card fees to process their tips.
  • Restaurants and other service related businesses Illegally charging employees a “house-fee” – this amount is usually based upon the amount of tips earned during the shift or a percentage of the employee’s sales.
  • Restaurants requiring employees to eat meals at the restaurant, where the restaurant makes a profit from the purchase of the mean.
  • Numerous examples of restaurants requiring waiters and waitresses to contribute to a tip pool of which a portion was distributed to back-of-the-house employees or management-level employees.
  • Numerous other examples of employers scheming up plans to retain employees’ tips or charge employees for items that are more properly considered a cost of doing business.


If you have any questions or if you would like to talk about your specific situation or your rights as a tipped employee, please contact us for a consultation 817-479-9229 or contact us online and someone from our office will contact you within 24 hours.

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