As Living Costs Rise Will Restaurants be Forced to Increase Wages?

 In Wage Law

One of the most hotly debated issues in wage and hour law is what constitutes a “living wage.” Depending on who you ask, you are likely to get a very different answer. While the minimum wage in the United States is $7.25 an hour, some states, as well as some corporations, are experimenting with paying workers a much higher minimum wage.

A “Living Wage”

Based on federal guidelines, a two-person household in the United States with an income below $16,910 is classified as living in poverty. This means that to exit the poverty level, one of the persons must make $.88 cents an hour more than the minimum wage.

The federal guidelines were created in 1969 and have yet to be amended or altered. Instead, the number of individuals in the poverty class has been reformed based on increases in the Consumer Price Index. Furthermore, because these guidelines were created in the 1960s, technological advances, such as housing and transportation, were not taken into consideration.

Restaurant Employees

Based on statistics compiled by the Bureau of Labor Statistics, the average hourly wage for servers in 2018 was $12.42 an hour or $25,830 a year. The state of Texas, as well as California and Florida, have some of the highest numbers of restaurant employees in the country. Despite their high concentration, restaurant employees in Texas make an average wage of between $20,780 and $23,670 a year.

As a result, many restaurant employees are left to question whether an amount close to the “living wage” is sufficient for survival. This also means that restaurant employees who are deprived of adequate pay by their employers can quickly find themselves facing financial challenges that make it difficult to exist on a day to day basis.

Are You Compensated for What You are Owed?

The best way for restaurant employees to make sure that they receive the compensation that they are owed is to be aware of common violations committed by restaurant owners under the Fair Labor Standards Act.

Some of the most common strategies to deprive servers of the pay they are legally owed include:

  • Unlawful deductions including for uniforms, credit card processing fees, linen fees, walked tabs, cash shortages, wrong-ordered food, and many other types of deductions
  • Illegal tip pools, requiring servers to share tips with employees who do not qualify to receive tips
  • Utilizing a “tip credit” minimum wage while requiring servers to complete tasks with no opportunity to earn tips
  • Excessive side-work
  • Retaining tips solely for restaurant owner’s personal benefit
  • Failure to pay for pre and post shift work
  • Employment at multiple stores, which allows employers to deprive employees of any overtime pay
  • Failure to pay restaurant employees who work more than 40 hours a week overtime pay (commonly time and one half)
  • Deducting required uniforms or other required materials from employees’ wages

Speak with an Experienced Wage and Hour Attorney

If you are a restaurant employee who was paid less than you earned from an employer, it can quickly become challenging, if not impossible, to meet daily financial obligations (i.e. paying bills). In these situations, one of the first steps that you can take is to speak with an experienced wage and hour attorney at Herrmann Law today.

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