Beware of tip-pooling violations

At a time when businesses, particularly in the food service industry, are struggling to remain open amid a fluctuating economic situation, workers need to be wary of wage theft violations their employers can commit that deny them their rightful pay. At the intersection of federal and state employment laws, there are common practice rules in industry-specific jobs that both the Fair Labor Standards Act (FSLA) and Texas law address.

While restaurants struggle to stay open in Houston and other parts of the country, shifting their hours of operation to comply with health regulations or to manage operations with fewer workers, employers are sometimes unaware of these laws or will ignore them altogether. These wage violations misuse FSLA exemptions or misinterpret minimum wage and overtime requirements for their bartenders and servers, misapplying tip credit or tip pooling.

Tip-pooling and other wage violations in Texas

Because employers often either do not understand how tip income works in order to comply with federal and state law, or intentionally withhold or misinterpret the provisions, it is important to know what protections there are for food service workers in the Lone Star State.

Some frequent wage theft violations can occur when the employer:

  • does not cover the difference between hourly wages and minimum wage. Food service workers must receive the federal and state minimum wage of $7.25 per hour. The employer may pay workers an hourly minimum of $2.13 as long as at least the remainder, or $5.12, comes from earned tips. If earned tips do not cover the difference, Texas law requires the employer to cover the difference.
  • charges a service fee on earned tips.
  • withholds tips when the worker did not agree to a tip-pooling arrangement
  • delays paying tip income, citing credit card payment delays.
  • does not pay minimum wage to a worker who works both in a tipped position and a nontipped position.
  • does not calculate the base rate when applying time-and-a-half

Knowing your rights and fighting for them

When it comes to wage theft or wage and hour disputes, many workers either fear they will lose their job or that they will face retaliation or discrimination from the employer if they question their pay. It is important to know that there are laws in place and a legal process that allows workers to address unfair labor practices.

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