Servers paying for mistakes

Discussion in 'Professional Chefs' started by ccjp, Sep 1, 2013.

  1. ccjp


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    Professional Chef
    I work in a restaurant where the house policy is for serving staff to pay for their own mistakes.  Example: ringing in the wrong item, forgetting to modify dietary restrictions etc.  In a situation like this where the guest is impacted, the servers are required to pay (out of pocket) for the wrong item, as well as the replacement one.

    I am convinced that ethically this is wrong, when your staff makes mistakes it should simply be included under the cost of doing business. I am seeking advice on the legality of it.  Is there any recourse in law against this?  Opinions and ideas please...
  2. cacioepepe


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    Professional Chef
  3. brandon odell

    brandon odell

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    There are both federal and state labor laws regulating tipped employees, so you should look at your state's labor laws for further clarification. When federal and state laws intersect, the one that most benefits the employee applies.

    In regards to deductions, if the employee is making only the federal minimum wage of $2.13 per hour for a tipped employee, the restaurant may not deduct anything from the employee outside of allowed benefits because it will drop the employee's wage below minimum wage. The reason it will drop it below minimum wage, regardless of how much the server actually makes in tips, is because the employer may only claim $5.12 of the employee's tips toward a "tip credit" which brings the employee's $2.13 per hour wage up to the federal minimum of $7.25. So, even if the server actually earned $15 per hour in tips, the restaurant can only claim $5.12 toward calculating toward the minimum wage they have to pay by law. Essentially, unless a restaurant pays over $2.13 per hour, they cannot make a deduction without violating federal minimum wage law.

    State laws often bring the minimum wage higher than the federal wage, and they may also raise the amount of employee tips the owner can apply toward the "tip credit". However, many of these states also have a law against an employer making deductions that bring the employee's wage below the state minimum wage. If they also put a cap on the "tip credit", it basically makes deductions illegal unless the restaurant pays over the states minimum base rate (i.e. $2.13 per hour).

    This excerpt is from a fact sheet from the Department of Labor website, Most questions like these are cover in the fact sheets and FAQs.

    Typical Problems

    Minimum Wage Problems:
    • Where an employee does not receive sufficient tips to make up the difference between the direct (or cash) wage payment (which must be at least $2.13 per hour) and the minimum wage, the employer must make up the difference.
    • Where an employee receives tips only and is paid no cash wage, the full minimum wage is owed.
    • Where deductions for walk-outs, breakage, or cash register shortages reduce the employee’s wages below the minimum wage, such deductions are illegal. Where a tipped employee is paid $2.13 per hour in direct (or cash) wages and the employer claims the maximum tip credit of $5.12 per hour, no such deductions can be made without reducing the employee below the minimum wage (even where the employee receives more than $5.12 per hour in tips).
    • Where a tipped employee is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, the employee is owed all tips he or she contributed to the pool and the full $7.25 minimum wage.
    flipflopgirl likes this.