Following an investigation by the U.S. Department of Labor, a federal judge in Michigan has ordered the owners of a breakfast restaurant to pay nearly a quarter of a million dollars in back wages and damages to more than 100 employees. The DOL’s Wage and Hour Division determined that the owners were responsible for a number of wage-related violations, including requiring tipped employees to contribute $2 per hour from their tips as a condition of continued employment.
“Requiring employees to hand over part of their tips to their employer poses a serious problem to workers who, in many cases, are already struggling to get by,” said Mary O’Rourke, a local Department of Labor official. “[It] also undercuts those employers that obey the law and pay their workers properly. She and other regulators hope the judgment serves as a “wake-up call” to those looking to take advantage of their workers.
Other violations included failure to pay worked overtime and requiring employees to pay for mistakes and uniforms, which resulted in compensation below the federal minimum wage standards.
Federal Wage Violations
According to the Fair Labor Standards Act, federal law permits restaurant owners to claim a credit toward minimum wage requirements for tipped employees. To remain in compliance with the federal regulations, an employer is required to pay a tipped employee $2.13 per hour, which when added to tipped received must total more than the federal minimum wage of $7.25 per hour. If it does not, the employer must compensate the worker for the difference.
While the restaurant in Michigan failed to meet even the federal standard, labor regulations here in Illinois can be even more strict. An employer in Illinois must pay a tipped employee no less than $4.95 per hour, with the expectation that tips will comprise at least the rest of the state minimum wage of $8.50 per hour. As with the federal law, if the worker’s tips and paid wage do not meet at least the minimum wage requirement, the employer must make up the difference or risk wage violation penalties.
Let Us Help
If you own a restaurant or other establishment requiring a staff of tipped employees, it is important to fully understand your inherent responsibilities. Contact an experienced Schaumburg employment law attorney at The Miller Law Firm, P.C., today. Whether you are currently facing a wage violation legal concern or are simply looking to protect yourself in advance, we can provide the legal guidance you need. Call 847-995-1205 to schedule an appointment.