Could a Restaurant-Host Lawsuit Have National Wage Ramifications?

According to USA Today, a Delaware labor lawsuit over a restaurant’s wage system could have an impact on wage claims filed nationwide. Photo of earnings statement

The news source reports that the Delaware Department of Labor is seeking to recover wages for three workers in a case, which claims that hosts should be paid an hourly wage and not be considered “tipped employees.”

The lawsuit is against the steak chain Texas Roadhouse. Workers at a Middletown restaurant who are employed as hosts usher customers past steak displays and distribute bread-and-butter baskets once they reach tables. However, as hosts, they reportedly earn $4 per hour and share a tip pool.

The lawsuit, which has made its way to a state Superior Court after Texas Roadhouse sued the labor department, claims the employees should not be treated as tipped workers. Keep in mind, when restaurants consider employees tipped workers, they can provide them with an hourly base wage less than that required federal or state minimum wages.

The state maintains that the hosts should be paid a full hourly minimum wage, rather than be considered tipped employees. Critics of the tipped system say it promotes “pay inequality and disproportionately harms women and people of color.”

Sylvia A. Allegretto, a research economist and co-director of the Center on Wage & Employment Dynamics at the University of California, Berkeley, told USA Today that the case could affect wage lawsuits nationwide involving restaurant workers. The lawsuit was filed after it was discovered over the course of one period that minors employed as hosts were paid $4 per hour with money from the tip pool, which was used to bring them to at least the full hourly minimum wage.

Talk to Our Los Angeles Labor Attorneys If You Have Concerns About Your Tipped Wages

In California, employers cannot use an employee’s tips as a credit toward its obligation to pay the minimum wage. If you have questions about this, you can visit the Department of Industrial Relation’s website, which has an FAQ page about tips and gratuity.

If you work in a restaurant and believe that your tips are being pooled illegally or you are being paid improperly, contact our Los Angeles labor attorneys. You may be able to file a wage claim and/or lawsuit seeking back pay and damages.

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Kesluk, Silverstein & Jacob—Los Angeles employment attorneys