Server Alleges Aspen Restaurant Operators Illegally Pooled Waitstaff's Tips

waiters tip poolWaiting on restaurant tables can be demanding and messy work. For many food servers, however, the reward lies in the form of tips that customers leave, making an otherwise paltry-paying job a bit more lucrative.

Waitstaff might do even better if they didn't have to part with some of those earnings. It's routine for servers to "tip out" to bartenders, bussers and others who work in the dining room.

It's because of those tips that the federal government and many states allow restaurants to pay tipped staff less than minimum wage. Uncle Sam, for example, permits employers to pay those who earn more than $30 a month in tips just $2.13 an hour, instead of the current $7.25 an hour mandated for other jobs.

The $5.12 difference is known as a tip credit and usually applies only to staff who work in the dining room. But employers don't always play fair. Some restaurant operators, for example, demand that servers share their tips with other restaurant employees, a practice that some states frown upon.

For employers to take a tip credit against the minimum wage, they must adhere to state labor laws, which in some cases allow for tip-pooling, the equitable distribution of tips among staff.

In tony Aspen, Colo., it's just such a practice that is at the heart of new lawsuit, filed against the owners of Cache Cache, an upscale restaurant that serves "classic French country fare" that "runs $150 or more for two with wine," according to The New York Times.

Sandro Torres, a former back waiter and food runner at Cache Cache, accuses the restaurant of running an illegal tip pool among its employees, according to documents filed Friday in U.S. District Court in Denver.

According to The Aspen Times, Torres made $4 to $4.25 an hour -- less than both federal and state minimum wages -- during his employment at Cache Cache, which ran from February 2004 to March 2008 and again from January 2011 to April.

From the Aspen newspaper's report:

By Colorado law, the suit alleges, the only employees who can collect from a tip pool are "front of the house" workers such as servers and hostesses. But at Cache Cache, such employees as chefs, dishwashers and food preparers -- who were not regularly tipped -- also participated in the tip pool, the suit says.

By doing so, Cache Cache violated the Colorado Wage Claim Act and the federal Fair Labor Standards Act, the suit alleges.

Torres is seeking reimbursement of wages that he feels are due him. So far, he is the only plaintiff in the suit, but the complaint seeks participation from other "similarly situated plaintiffs ... whose tips were diverted illegally," to become a class action, according to the Times.

In similar news, the U.S. Supreme Court last week refused to hear a challenge to a lawsuit involving Applebee's International Inc., one of the largest casual-dining chains in the nation.

More than 5,500 bartenders and servers allege that the restaurant chain underpaid them by claiming the tip credit, allowing Applebee's to pay them less than $7.25 an hour, even though the chain required the workers to spend a substantial amount of time on work which didn't produce tips, such as cleaning and general preparation, reports The Wall Street Journal.

Applebee's says the reduced hourly wage is permitted because the duties are an integral part of servers' and bartenders' jobs.

U.S. Department of Labor rules stipulate that tipped workers are entitled to the full minimum wage during work periods in which they don't earn tips, if they spend more than 20 percent of their time performing such duties.

In refusing to hear the case, the Supreme Court lets stand previous lower federal court rulings, allowing the employees' lawsuit to proceed.

For its part, Applebee's says the lower court rulings would "impose crushing administrative and financial burdens on restaurants and other employers of tipped employees," according to the Journal.

Next: Woman Cursed Out By Barbecue Restaurant, She Says, For Bad Yelp Review




Don't Miss: Companies Hiring Now



Stories from CNNMoney

Add a Comment

*0 / 3000 Character Maximum

2 Comments

Filter by:
Noreen

So, pay the workers minimum wage and forget tipping. Win-win for servers and patrons!

January 23 2012 at 6:08 PM Report abuse rate up rate down Reply
1 reply to Noreen's comment
osty

For a server, you call being paid minimum wage a "win" situation?

February 01 2012 at 11:04 AM Report abuse rate up rate down Reply

Search Articles

Top Companies Hiring

Week of Oct 26 - Nov 2
View All

Picks From the Web