Restaurant Expert Overview of Recent Wage and Tip Credit Lawsuits

Review from a restaurant expert perspective of two class action lawsuits suggests owner and operators should take a closer look at work procedures, staffing and tip credit policies. One case involves in part a recent judgment about the distribution of workloads based on what qualifies under tip credit procedures. The other lawsuits filed against other restaurant chains surrounds similar issues as well as work done off the clock. In the first case, one major issue has to do with the amount of non-tip credit work that was done by servers and bartenders whose job descriptions are predominately for customer service. Some of these non-tipped duties included cleaning of restrooms, mopping floors and dishwasher duties. Owners, managers and their restaurant expert team can read more about the recent summary judgment decision here. The second case has similar issues. However, besides the allegation of doing side work beyond 20% of their server time when on duty, is the allegation that these employees were being asked to perform uncompensated work off the clock. The full story as part of our restaurant industry analysis can be read here. Both lawsuits serve as wakeup calls to reexamine your management and staff policies and procedures and how you may be affected based on both the federal and your own state or local jurisdiction wage and hour requirements. As part of your restaurant planning and labor guidelines, you might ask and answer these key questions about compliance: – Are servers required to wait until customers begin arriving before they can clock in, yet are performing some other type of work in the mean time? – Do tipped employees, who are paid based on a tip credit, routinely devote more than twenty percent of their working time toward non-tipped duties such as side work? – Does it exceed the tip credit allowable when apportioning side work done by part time servers who work shorter shifts? Lastly, have you as an owner, operator or restaurant expert been involved in similar disputes? If so and to the extent you can discuss the problems and outcomes, please share your comments below.