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DOL: Tennessee Restaurants Compensate Servers $270K for Mandatory Tip Sharing with Dishwashers

The Tennessee Department of Labor (DOL) recently reached a settlement with several restaurants in the state, requiring them to pay a total of $270,000 in back wages to servers who were instructed to share their tips with dishwashers. This settlement highlights an ongoing issue within the restaurant industry of wage theft and unfair wage practices.

Under federal law, tipped employees are required to be paid a minimum cash wage of $2.13 per hour, as long as their tips make up the difference between the cash wage and the federal minimum wage of $7.25 per hour. However, employers are prohibited from taking a share of their employees’ tips, except in certain circumstances.

In this particular case, several restaurants were found guilty of violating this rule by instructing servers to share their tips with dishwashers. According to the DOL, dishwashers are not considered “customarily and regularly tipped employees” and are therefore not entitled to a share of the tips.

The restaurants involved in the settlement must now pay the affected servers their respective share of the $270,000 in back wages, compensating them for the amounts they were forced to share with dishwashers. Additionally, the establishments have been required to change their policies to ensure compliance with federal labor laws.

This settlement is a significant win for servers who, too often, fall victim to wage theft in the restaurant industry. Many rely heavily on tips to make a livable income, and being forced to share those tips can be financially devastating.

While it is understandable that restaurant owners may want to ensure their dishwashers receive fair compensation for their work, it is essential to do so without infringing on the income of tipped employees. Dishwashers and other non-tipped employees should be paid a fair wage that is independent of the tips earned by servers.

This settlement also highlights the importance of proper employee education and awareness about labor laws within the restaurant industry. Employers should take responsibility for ensuring their staff understands their rights and rights of their colleagues regarding wages and tips. Encouraging open communication and transparency can help prevent future violations and maintain a fair working environment.

Overall, this settlement serves as a reminder for restaurant owners and employees alike to remain informed about labor laws and to report any violations they may encounter. By holding employers accountable, we can work towards a restaurant industry that provides fair compensation and supports the livelihoods of all its workers.

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