Top 10 Ways Waiters & Waitresses Are Illegally Underpaid

Even in the best of cases, most waiters and waitresses are underpaid for the type of work they do.  Unfortunately, some employers compound the problem by using illegal pay policies.  Sometimes it is intentional and others it is either accidental or out of ignorance, but whatever the case, it is important that you fight for the money you are entitled to.  The following are some of the most common ways wait staff are underpaid:

Sharing Tips with Managers or Owners

Restaurant owners, officers, or managers can’t share in tip pools or require servers to share tips with them.   Servers or other workers holding positions that normally receive tips should not be required to “tip out” to managers.

Deducting for Meals You Don’t Get

Sometimes restaurants deduct a certain amount of money per shift for meals they provide to staff to eat on their lunch breaks.  When done right, this can be a great benefit of working at a restaurant!  However, sometimes restaurants will make these deductions and then either not actually even provide the food at all, or won’t allow people break time enough to actually sit down and have a meal.  When the deduction is consistently taken out from your pay each week but you’re not even getting a chance to eat the food you’re paying for, you may have a claim.

Deductions for Break Times You don’t Take

If your employer automatically deducts 30 minutes or even an hour for a meal break, but you end up working through your normal break, this is a form of wage theft.  If your company requires you to take a meal break, you must be allowed to take it.  If you aren’t, then you should get paid for this time.

Improper Minimum Wage

Minimum wages are calculated differently for restaurant staff than most other industries, which can make this confusing.  If you suspect that your hourly rate of pay (not including tips) is lower than the legal minimum wage, you are entitled to your lost compensation.

You are paid tips only, no hourly wage at all

In many restaurant jobs, most of servers’ earnings comes from tips, not the hourly wage.  However, restaurants still have to pay the legal “sub-minimum wage” rate.  Though it may go up, right now in New York that is $5.00; under federal law it’s $2.13 per hour.  Now, keep in mind, depending on how things shake out, it may actually be ok to get a paycheck that says $0.00 on it.  For example, if you work 20 hours at $5.00 per hour, that’s $100.  If on top of that you bring home $900 in tips than the taxes withheld on the total $1,000 of your earnings may turn out to be greater than the $100, meaning all of it gets withheld.  That being said, if the company is just not paying you the $5 per hour GROSS (before taxes), that’s a violation.

Not Paid for Pre or Post Work Activities

If you are required to come into the restaurant to perform pre-work activities like cleaning up, learning the menu, or just about anything else, you should be getting paid for these hours.  Similarly, if at the end of your shift you have to stay after to wipe down tables or perform other duties, this should be paid as well.

Incorrect Overtime Pay

The overtime rate applicable to tipped employees is unusual, and employers frequently get it wrong.  If the minimum wage rate is $8.00 an hour and your “subminimum” wage rate is $5.00 an hour you are supposed to be making up the $3 difference between $5 and $8 in tips. That’s why restaurants are allowed to pay you less than $8 per hour.  But, when you work more than 40 hours a week, the overtime rate is NOT $7.50 per hour – but, sadly, nor is it $12.  It’s time and a half the minimum wage (so, $8 x 1.5 = $12), minus the “tip credit” amount ($3 in our example).  So, the correct overtime rate here would be $9 per hour.

Paid in Cash

If you don’t know what your pay is for because you’re paid in cash with no paystubs it can be confusing.  There’s nothing inherently wrong with being paid in cash, but you do need to be provided enough information to determine if it’s the right amount of cash. There’s a state law in New York that requires employers to give you a pay stub.  It doesn’t have to be fancy, but it does have to include all the important information – your rate of pay, the quantity of hours or units you worked, and then any deductions and what they’re for.  If your employer is not giving you pay stubs, the employer might be liable to pay you a statutory penalty for this failure.

Failing to Receive Wage or Tip Notices

Just like employers in New York are required to give you pay stubs, they also have to give you a couple of other kinds of notices.  First, they have to provide you with a Wage Notice.  This is a simple one page form that basically just lists your rate of pay and what your overtime rate is.  Second, if you are a tipped employee and the employer wants to pay you the “subminimum wage” rate or anything less than the actual minimum wage rate, then they have to give you a form notifying you of this and describing the “tip credit” – that is, the idea that the employer can pay you at the lower rate lower than minimum wage if you are earning the difference between that and minimum wage (or more!) in tips.  If they have not given you these notices, they may be liable for statutory penalties.

No Spread of Hours Pay

In New York, when the time between the start of your shift and the end of your shift is more than 10 hours (even if you have a break somewhere in there), you are entitled to be paid for an extra hour’s worth of minimum wage pay for that day.

If you believe that any of these types of wage theft have occurred to you, contact our offices to set up a free, confidential consultation with an attorney.  We will review your case and help you to decide how you should proceed.