Restaurant Wage and Hour Expert Tips to Avoid Tip Lawsuits

Employee tip pooling and other distribution policies from a restaurant wage and hour expert perspective can be a source of contention amongst hospitality and foodservice industry workers. Worse, it has given rise to a number of disputes and lawsuits. Most notably is the recent settlement by Outback of $1.25 Million involving their employees in Minnesota. According to the recent article in Nation’s Restaurant News: “A U.S. District Court in Minnesota recently approved a $1.25 million settlement for a lawsuit between OSI Restaurant Partners LLC (the parent company of Outback Steakhouse) and about 1,200 Outback Steakhouse servers in Minnesota, who alleged in that their employer required them to share their tips with bussers and hosts. The class-action lawsuit was filed last year and the court ruled that the tip-sharing violated the Minnesota Fair Labor Standards Act prohibition on employer-run and mandated tip pools. Outback issued a statement saying that they believed their practices fell into accordance with state law, but that they settled to avoid the hassle and expense of prolonged litigation.” Attorneys and restaurant wage and hour expert firms can read this related story on the settlement. Still, these lawsuits can be avoided. We recommend including one of these six suggestions from this lawyer and restaurant employment expert in your labor policies and procedures: “Have a management-side employment attorney conduct an audit of your existing labor and employment practices. An audit reviews personnel practices from the application process through termination and/or retirement. A properly conducted audit can find violations, offer recommendations for correcting legal violations and provide suggestions for implementing best practices. An audit is particularly useful now in light of the many recent changes made to federal and state employment laws.” Need other ideas and tips from our restaurant management specialist group? Be sure to subscribe to our blog and get weekly updates on restaurant wage and hour expert commentary and more.