But as in every profession, there is always the possibility that certain days aren't as good as others. What the Houston fair overtime wage lawyers at Kennedy Hodges want to stress to readers is that under the Fair Labor Standards Act, you are entitled to minimum wage pay - even on the days that your tips aren't that high.
We have seen tipped employees encounter many problems after their employers try to violate FLSA regulations. Some of these problems include:
Not meeting minimum wage: The employee is paid the minimum wage required for tipped employees ($2.13 per hour), but the tips he or she earns are not enough to meet the federal minimum wage of $7.25. In this instance, the employer must pay the difference. For example, say that in an 8-hour shift the employee only makes $25 in tips. The hourly rate of $2.13 for eight hours is $17.04, making the total pay for the day $42.04. Since the employee is required to make at least $7.25 per hour ($58 for an 8-hour shift), the employer is required to pay the difference of $15.96.
Tip pooling: If an employee is required to contribute to a tip pool where non-tipped employees receive some of that money, the FLSA says that the tipped employee is entitled to all of the money that he or she contributed to the pool as well as the full $7.25 minimum wage.
Dual jobs: The tipped employee is required by the FLSA to receive full minimum wage pay for the time spent not performing tip-earning duties. For example, if a waiter spends more than 20% of his or her time cleaning, making coffee, or rolling silverware, then the individual is entitled to an hourly wage of $7.25 - not $2.13.
Overtime miscalculation: Many employers think that they can pay overtime on the hourly rate of $2.13. This is not the case. Overtime should be paid at one and a half times the hourly rate of $7.25, minus the tip credit of $5.12.
Here are two scenarios to illustrate this, using a situation in which a tipped employee works 46 hours in one week.
Incorrect:
40 hours per week at $2.13 = $85.20
6 hours of overtime = ($2.13 x 1.5) x 6 = $19.17
Total pay for 46 hours = $85.20 + $19.17 = $104.37
Correct:
40 hours per week at $2.13 = $85.20
Overtime rate = ($7.25 x 1.5) - Tip credit of $5.12 = $10.88 - $5.12 = $5.76
6 hours of overtime = $5.76 x 6 hours = $34.56
Total pay for 46 hours = $85.20 + $34.56 = $119.76
In the incorrect scenario, the employer failed to pay $15.39. It is important to note that this pay is separate from whatever tips the employee made - tips that he or she is entitled to keep regardless of hourly wage.
On paper, $15.39 may not seem like a lot of money. But multiply that number by 52 weeks in a year, and it adds up to a whopping $800.28.
Don't let these common problems plague you. If you are a tipped worker in Houston and you feel that you are not being paid what you should, contact an experienced Texas overtime attorney .
The lawyers at Kennedy Hodges can provide you with a free copy of Ten Biggest Mistakes That Can Hurt Your Wage and Overtime Claim. Just call 888.449.2068 today. Or request a complimentary case evaluation by filling out our online form, and an attorney from Kennedy Hodges will get right back to you to schedule a free consultation.