A Business-Minded Approach To Employment Law

Understand the Tipped Minimum Wage Laws and Common Florida Violations

On Behalf of | Jun 21, 2016 | Wage And Hour |

One of Florida’s leading industries, hospitality, is also one of the most frequently preyed upon groups of workers statewide. Many employers starting in the industry assume that things are legal the way that they are, or that they are simply the industry standard. The amount of misinformation and unlawful policies that are considered the “norm” is unsettling. Here we will explore the various ways hospitality and restaurant industry employers could be at risk for labor law violations.

While the standard minimum wage has been raised proportionately over the 20 years, the tipped minimum wage has stayed at the same, at a measly $2.13 since 1991. Tipped minimum wage was originally intended to be exactly half of the standard minimum wage, but lawmakers have neglected to enforce increases, allowing it to plummet to only 29% of the regular federal minimum wage.

This massive failure has forced the consumers to make up the difference in pay; while a 10% tip was once a national standard, waiters today expect at least 15% for mediocre service and 20% to make a proper hourly wage at a high end facility. While tipped wages are protected by law, an employee must prove that their total income (tips and regular wages) totals are less than the minimum standard wages. If this is the case, their employer is required by law to make up the difference.

Another issue involving tips is pooling. Although tip-pooling can be beneficial to employees, it can also be misused by employers. It is unlawful to pay back-of-house staff (such as line-cooks, dishwashers, stockers and cleaning crew, often who are illegally employed to begin with) a tipped minimum wage to save in labor costs. This risky practice may save the company more than 60% on non-service wages, but cuts wait staff tip wages by more than 50%, which is definitely not in accordance with the law.

According to the Federal Department of Labor, only employees who regularly receive tips can be part of the pool AND employees must receive notice that they will be pooling. Employees cannot be required to share their tips with employees who do not actually receive their own tips, like dishwashers or cooks. Also, no employers are allowed to take a dip into the pool: Tips should never go to the employer or owner, or managers or supervisors. This commonly ignored rule is rampant in the industry, although employers should know that they are playing with fire if one of their employees raises a case against them.

Knowledge is power; employers should learn the labor laws to protect themselves, their employees and their company from any unnecessary penalties that could arise. If a violation is discovered, make sure to reach out for legal help as soon as possible to minimize the damage and prevent further violations.