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Pittsburgh restaurant ordered to pay back tips to servers

A Pittsburgh restaurant was ordered by the U.S. Department of Labor's Wage and Hour Division to repay servers more than $37,000 to compensate them for tips that had been diverted and paid to dishwashers. The restaurant owner had been requiring servers to contribute a small portion of their tips to additional pay for the dishwashers who do not receive their own gratuities.

The owner of the local restaurant who was subject to the judgment said that he thought he was doing something nice for his dishwashers by boosting their wages with a share of the tips.

The Department of Labor saw the situation differently and said that under the Fair Labor Standards Act, front of the house employees who are directly tipped cannot be mandated to share the gratuities with back of the house employees.

Samuel Cordes, of this firm, recently weighed in on the issue with local reporters, clarifying that the basic rule is that "tips do not belong to the employers. Anything that an employer does that would tend to keep those monies or direct how that money is distributed is generally a violation of FLSA."

It's easy to see both sides of this issue since dishwashers are not paid very well to begin with, but at the same time if one considers tips to be the same as wages, it doesn't make sense to divert a portion of one employee's paycheck to another employee.

At least one other Pittsburgh restaurant was subject to a similar order but has chosen to ignore similar orders and have not repay their employees. In order to collect, the employees must pursue a judgment by initiating a lawsuit against their employer. Some employers may choose not to pay and hedge their bets that an employee will not choose to sue for the lost wages.

More information about wage and hours claims against employers can be found on our Pennsylvania employment law page.

Source: Pittsburgh City Paper, "Bad Check: Some restaurant owners get reviews when it comes to tip pooling," AmyJo Brown, Feb. 20, 2013.

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