Wage Theft Reality Check
June 16, 2023 8:58 AM Subscribe
I have a friend who works catering, both in tipped positions at events (server, chef, event manager) as well as at the home base (managing the warehouse of equipment, loading trucks). Going over their pay stub, it's now clear they're only being paid a tipped hourly (minimum) wage for both, and then having a tip applied over this base wage - sometimes at a different rate based on position.
I would have thought that there would be two lines in her pay stub for the two different positions, with different hourly rates, as they're essentially working two types of jobs (a service job that's tipped, a regular 9-5 job that's not). Is this an industry standard practice, or or we smelling something a bit more rotten?
This friend started as a server at events, but moved to more of an operations position which generally works 9-5, while also taking on responsibilities of events at the location as a tipped worker. Long days that stretch into the night are common.
They were offered the 9-5 hourly job with an advertised hourly rate, but as we looked at their paystub, the hourly they are getting is much lower - it's the State's tipped minimum with tips applied. To be clear, there is no client to give these tips to them - it's just a hourly, 9-5 job. Tips at the company are pooled - employees never see nor handle tipped money, so there's no way to know how much they're being actually being tipped - it could be more, or less than what they received - who knows?
This gets a little ugly when it's time to calculate overtime. They've been working for at least a month of 6 days/50 hours a week weeks. Overtime in my State is anything over 12 hours day or 40 hours/week. Their overtime is calculated on the TIPPED hourly, and since they're paid a very low minimum waged tipped wage for a not-tipped position, there's money left on the table that I feel belongs to them - about 20-25% of their hourly.
It seems this company basically pays anyone that's not higher up this minimum tipped hourly, then adjusts pay based on role/performance by applying more, "tips" and this IMHO is just bad/lazy accounting - but is it illegal?
Giving employees this money as tips also means taxes aren't being taken out, which may make the State's Department of Labor very interested in how they're (to my eye at least) dodging paying employment tax while also stealing wages from their employee.
I just don't know the line between "sleazy business practices" and "this is absolutely illegal and file a complaint, if not call an investigative journalist to publicly decry this business". I haven't worked enough service jobs to know which is which to help my friend.
My friend is scared to bring too much of this up, as they may get fired. There's an never ending supply of naive people to work these positions, care of the local university. This business has been running for many decades and is an entrenched institution in the local community.
I would have thought that there would be two lines in her pay stub for the two different positions, with different hourly rates, as they're essentially working two types of jobs (a service job that's tipped, a regular 9-5 job that's not). Is this an industry standard practice, or or we smelling something a bit more rotten?
This friend started as a server at events, but moved to more of an operations position which generally works 9-5, while also taking on responsibilities of events at the location as a tipped worker. Long days that stretch into the night are common.
They were offered the 9-5 hourly job with an advertised hourly rate, but as we looked at their paystub, the hourly they are getting is much lower - it's the State's tipped minimum with tips applied. To be clear, there is no client to give these tips to them - it's just a hourly, 9-5 job. Tips at the company are pooled - employees never see nor handle tipped money, so there's no way to know how much they're being actually being tipped - it could be more, or less than what they received - who knows?
This gets a little ugly when it's time to calculate overtime. They've been working for at least a month of 6 days/50 hours a week weeks. Overtime in my State is anything over 12 hours day or 40 hours/week. Their overtime is calculated on the TIPPED hourly, and since they're paid a very low minimum waged tipped wage for a not-tipped position, there's money left on the table that I feel belongs to them - about 20-25% of their hourly.
It seems this company basically pays anyone that's not higher up this minimum tipped hourly, then adjusts pay based on role/performance by applying more, "tips" and this IMHO is just bad/lazy accounting - but is it illegal?
Giving employees this money as tips also means taxes aren't being taken out, which may make the State's Department of Labor very interested in how they're (to my eye at least) dodging paying employment tax while also stealing wages from their employee.
I just don't know the line between "sleazy business practices" and "this is absolutely illegal and file a complaint, if not call an investigative journalist to publicly decry this business". I haven't worked enough service jobs to know which is which to help my friend.
My friend is scared to bring too much of this up, as they may get fired. There's an never ending supply of naive people to work these positions, care of the local university. This business has been running for many decades and is an entrenched institution in the local community.
If they are too scared to talk to the person who hired them then they are likely too scared to be a whistleblower. They should not be scared to bring this up. They should go over each day of the month and tally their hours at tipped and non-tipped jobs and have that list in front of them with two tallies. Also any signed agreements or offer verbiage they should have that too. Then just go to the boss and say, “I’m very confused about how these two positions are being compensated, can we walk through the numbers?”
posted by amanda at 11:00 AM on June 16, 2023
posted by amanda at 11:00 AM on June 16, 2023
I think your friend should bring this up because it might actually be a payroll error. I’m not saying that’s right but it does happen, especially when people move from one position to another. Also, bringing it up in that spirit gives them an out, like “I’m so sorry I didn’t notice until now but my position isn’t being paid at the posted rate, and I wouldn’t want that error to continue.”
posted by warriorqueen at 2:42 PM on June 16, 2023 [2 favorites]
posted by warriorqueen at 2:42 PM on June 16, 2023 [2 favorites]
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You want to look at the bottom of the page for "Work that is not part of the tipped occupation" and show this to your friend. Look as well at "Substantial amount of time" since it sounds like your friend spends most of his time doing work that is not a part of the tipped occupation.
Your state Department of Labor should be able to protect the confidentiality of a whistleblower, and an employee-side employment lawyer would be able to as well. I'd encourage your friend to explore their options.
posted by gauche at 9:21 AM on June 16, 2023 [4 favorites]