As Columbus, Ohio and Toledo, Ohio unpaid overtime and minimum fair wage attorneys, it is important to inform tipped employees of their rights under federal and Ohio law. Often times employers in the restaurant, hospitality and service industries try to increase profits at the expense of their employees who depend on tips as a large part of their compensation. In these industries, employers sometimes fail to ensure they meet minimum wage rate requirements, handle the "tip credit" properly, and fail to help tipped workers understand their pay. Failure to adhere to the FLSA and Ohio requirements results in unpaid overtime and minimum fair wage violations.
This post is to provide a brief overview of issues facing tipped employees, mainly the requirement of a tip credit notice as well as the requirement to still pay tipped employees overtime when they work over 40 hours in a workweek. If you believe you are owed unpaid overtime or minimum wages as a result of your employer's conduct, contact a Columbus or Toledo Ohio and FLSA attorney at Bryant Legal, LLC to discuss in more detail.
The federal Fair Labor Standards Act of 1938 (FLSA) requires employers to pay employees at least the federal minimum wage rate, currently $7.25 per hour. One exception is the “tip credit.” Both the FLSA and the Ohio Act permit employers to pay “tipped employees” less than the statutory minimum wage if the tips the employee receives, when combined with the hourly wages paid by the employer, equals or exceeds the minimum wage. See 29 U.S.C. § 203(t). “Tipped employee” is “any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” Tipped employees largely work in the restaurant, hospitality and service industries and they regularly receive tips in the performance of their jobs. Examples include, but are not limited to waiters/waitresses, bartenders, strippers in strip clubs, and wait staff, among others.
Both statutes set a base wage that employers must pay to tippedemployees. Under the FLSA, the base wage for tipped employees is $2.13 per hour. Under Ohio law, the base wage for tippedemployees is one-half of the statutory minimum wage. This is known as the “tip credit” as described above. See 29 C.F.R. § 531.59. If the base wage and the employee’stips do not equal the statutory minimum wage, the employer is required to make up the difference.
To that end, there are several conditions to the tip credit. For an employer to claim a tip credit, its tipped employees: 1) must regularly receive at least $30 a month in tips, 2) must paid an hourly wage of at least $2.13 per hour, 3) must retain all tips, and 4) must be given actual notice, in advance, of the employer’s use of the tip credit provisions of the FLSA. (29 C.F.R. § 531.59).
The notice must include:
If you are a tipped employee and work over 40 hours per week, you are entitled to overtime pay at a rate of at least one-and-a-half times their standard hourly rate. Thus, tipped workers getting $2.13 per hour for regular time should be paid one and half times the minimum wage of $7.25 (which comes out to $10.88) for each hour worked over 40 hours in the given work week.
In the event you are a tipped employee and have reason to believe your wages are incorrect, you have not been paid overtime, your tips are not properly being accounted for, and/or you were not properly informed of a tip credit notice, contact an Ohio and FLSA attorney at Bryant Legal, LLC to discuss in more detail.