Written by Galen T. Shimoda and Justin P. Rodriguez
Among the hustle and bustle that exists in the day-to-day work environment for those in the restaurant industry, there is often confusion about the laws that affect a server's, bartender's, and busser's wages. It is no secret that issues arise typically because of the volatile nature of the industry. It can be hard for employers to anticipate the number of patrons and how busy it will be on any given night, especially for those restaurants or other similar establishments that have just recently began operating, recently became popular, or recently experienced a sudden decline in traffic due to a number of reasons. Arrangements regarding tips and tip pooling can also lead to confusion and even animosity between co-workers and management. While the California Labor Code and Industrial Welfare Commission Wage Orders apply to all workers in California, there are specific provisions that seem to come into play more often in the service industry than with other types of employment.
First and foremost is the issue of tips. California law states that tips are the property of the employee, not the employer. Thus, a manager or other person having authority to hire, discharge, supervise, direct, or control the acts of employees on behalf of the employer cannot collect any part of the tip unless it was intended for them and for service rendered (e.g. a shift supervisor waiting tables). Tip pools and tip credits against the minimum wage have also been major issues within the industry. However, California law prohibits tip credits against the employer's minimum wage obligation even though it may be permitted under federal law. Mandatory tip pooling has been upheld, however, where those participating in the pool are within the "chain of service" by providing either direct or indirect service. Furthermore, tips paid with credit or debits cards that incur a processing fee for that type of payment cannot be deducted for the amount of the processing fee.
Outside of the tipping context, the variety with which service industry employees are scheduled implicates a number of issues beyond the standard overtime claims. For example, where an employee is scheduled to work a six hour dinner shift, but, upon arrival, it is unexpectedly slow and the employer wants to send the employee home after working two hours, the employee would be entitled to additional reporting time pay equal to half their regularly scheduled shift (being compensated for a total of three hours' work even though they only worked two). Another example would be where the employee works the breakfast shift and is directed to come back to work the night shift the same day. This would result in the employee being entitled to an additional premium to compensate for the split shift.
Other employer policies that have a more significant impact for service industry compliance with wage and hour laws include make-up work time arrangements affecting whether overtime is actually owed for work over eight hours in a day, the upkeep and maintenance of mandatory uniforms and the repayment of deposits made for the uniforms at separation, and credits against employee wages for meals provided by employers.
This article provides only a snap shot of the issues affecting service industry employees, which require in-depth factual review and legal analysis. If you believe that you have claims against your employer for violating these or other wage and hour laws, please contact our office to have you claims evaluated.