Most of you probably know that employees are entitled be paid overtime for each hour worked over 40 in a given week assuming you are not exempt. However, did you know that if you work in a restaurant or other service industry, and are paid tips which are part of your compensation, your employer is not allowed to require you to share your tips with other employees who have little or no customer contact such as managers or dishwashers? This is called unlawful tip pooling and is generally a violation of Federal and state wage and overtime laws.
The Outback Steakhouse chain just learned about these laws the hard way. A U.S. District Court in Minnesota approved a $1.25 million settlement between OSI Restaurant Partners LLC, parent of the Outback Steakhouse chain, and about 1,200 Outback Steakhouse servers in Minnesota, who alleged in a lawsuit that Outback unlawfully required them to share their tips with bussers and hosts.
The class-action lawsuit, which was filed in April 2010, alleged that the tip-sharing violated Minnesota Fair Labor Standards Act prohibitions on employer-run and mandated tip pools. The U.S. District Court approved the settlement Tuesday.
If you work in a restaurant or service industry and believe that your tips are being unlawfully taken from you, speak with an employment law attorney who handles unpaid wage and overtime matters. Feel free to consult with Scott Behren and the Behren Law Firm about these issues.