Service & Restaurant Employee Wages: Avoid Labor Law Litigation
Restaurants and other service-based businesses benefit from an exception to state and federal minimum wage laws, allowing employees who receive tips for their services to be paid less than the $7.25 federal minimum. In Texas, “tipped employees” may be paid $2.13 per hour. Yet this exception must be applied with wise management, or else a restaurant may find itself in a nasty legal battle.
Minimum Wage Exception Lawsuits
In the last several years, there have been a number of class action lawsuits against restaurants who pay their servers at the lower, tipped employee minimum wage rate even when the server is performing services that do not allow them to earn tips. For example, a restaurant might ask its servers to roll silverware or to fill containers of sweeteners or condiments.
The minimum wage law exception for restaurant servers is very clear: you can pay your servers at the lower wage level of $2.13, but only for performing services to guests who will (theoretically) tip them. Any person performing tasks like rolling silverware must be paid the standard minimum wage for their performance of untipped labor. Fail to heed this advice, and you will be exposing your restaurant or other service-based company to significant legal risks.