We are seeing more and more cases involving unpaid wages. Along those lines an interesting case out of Texas called Bernal v. Vankar Enterprises, Inc.
Mr. Bernal worked at a series of Texas bars. Tips from customers that were placed in a tip pool and distributed among all employees including managers. Mr. Bernal’s base hourly rate of pay was less than federal minimum wage, and did not receive time and a half pay for overtime.
Mr. Bernal instituted a class action. He alleged violations of the Fair Labor Standards Act ("FLSA"). The FLSA establishes a minimum hourly wage and overtime requirements.
However, some employers are permitted to pay employees less than the minimum wage if the employees receives tips that, when added to their hourly wage, amount to more than the statutory minimum. This practice, known as taking a “tip credit,” is only permitted if the employer has informed the employees of the tip credit provisions and if the employees retain all tips.
The Court held:
1. The Bars violated their minimum wage obligations by failing to inform employees of the tip credit provisions, by requiring employees to cover cash register shortages and unpaid tabs, and by requiring employees to participate in tip pools which distributed tips to managers and janitors.
2. The Bars violated the FLSA by failing to pay appropriate overtime wages.
The economy’s tough. You work hard. If you are not getting paid what you deserve, you should contact an attorney to review both your situation and your employer’s practices.