A Lawsuit on The Right to Keep Tips

A lawsuit, filed in early 2010, saw employees of different Outback Steakhouse’s claim that they were unfairly being forced to share tips with other employees.

Under the alleged “unfair” system, employees had to split tips with:

  • Bussers
  • Hosts
  • Dishwashers

The employees were not told about the pooling system in advance, and therefore believed that their rights under the Fair Labor Standards Act were being violated. The FLSA contains specific provisions aimed at eliminating unfair employer-run tip pools.

Case Conclusion

The class-action lawsuit was successful, as the parent company of the popular chain agreed to pay $1.25 million in wages that should have been received by employees. This case is just one of the many that show workers all over the nation how the Fair Labor Standards Act can protect their rights.

6 Ways to Know if you are Part of an Unfair Tip Pooling System

If you believe you are a part of an unfair tip pooling system, we can help. But to make sure, read the list of factors which should have been explained to you in a tip pool notice. If the requirements below were not disclosed by your employer, you and your coworkers may have a case:

  1. The amount of cash your employer pays you should be determined, and it can’t be less than $2.13 per hour.
  2. The additional amount the employer is using as a credit against tips received must be decided. This extra amount cannot be more than the difference between the federal minimum wage and the amount the employer has agreed to pay you in cash per hour.
  3. Your company should explain to you that the additional sum it claims as the tip credit cannot be more than the value of tips that the employees actually received for their services.
  4. Employees must be informed about the tip credit provisions of the Fair Labor Standards Act.
  5. Unless a valid tip pool is implemented, all tips should be kept by the employee.
  6. The Fair Labor Standards Act protects employees in every corner of the country.  No matter how you believe your wage payment rights are being violated, our expert staff can help. Contact us today to learn more about our legal services, and in particular, how the Fair Labor Standards Act can help you receive the wages you deserve.

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