Unpaid Tips and Wages in Restaurants: How Common Is It?

Categories: In the Trenches

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Many waiters struggle to recover unpaid wages from current and previous employers.
This past Saturday night, the waitstaff and general manager at Ruggles walked out and shut down the restaurant, alleging non-payment of tips over more than a year's time. That came after news that Brasserie 19 is being sued by a former employee for alleged non-payment of wages over a five-month period.

Earlier this year, local chain Taconmadre agreed to pay $275,706 in back wages to 72 of its current and former employees after a U.S. Department of Labor investigation revealed that employees regularly received less than minimum wage and were required to work overtime without compensation.

These issues affect restaurants from large to small, from upscale to dirt-cheap. Wage theft is a $30 billion a year problem, according to the Interfaith Worker Justice Center. Its Houston branch helped workers recover $18 billion in two years alone. And that doesn't surprise attorney Todd Slobin, a partner with the law firm of Shellist Lazarz, LLP, who specializes in labor and employment law.

"The majority of restaurants, there's an FLSA [Fair Labor Standards Act] violation or a wage violation somewhere," Slobin said. "I would like to think that it's not malicious and it's a lack of understanding of the FLSA -- it's a very technical statute and it's very hard even if you know what you're doing to follow it appropriately."

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Want to make sure you waiter gets his tip? Leave cash.
Slobin doesn't represent any of the employees involved with Ruggles, Brasserie 19 or Taconmadre, but has handled local employment litigation here in Houston and on a larger, national scale with companies such as Starbucks and Chili's. FLSA infractions are rampant, he says. But the more troubling fact is that so few employees ever come forward and fight for themselves.

"I think a lot of workers tend not to want to rock the boat," he says. "They may not be paid the amount that they're supposed to be paid, they may not be receiving tips, they may not be receiving overtime yet they are afraid to come forward. You're supposed to come forward. You're supposed to go to someone that can help you."

But they rarely do. "The worst thing that I see is people who've never done anything about it and then tell me on the street later on," says Slobin. "Why didn't you do anything? Those are wages that those people have earned, that they're entitled to, that they should receive. It's a common practice that goes on."

Non-payment of credit card tips, as in the alleged situation at Ruggles, is one of the two most common violations Slobin sees in his line of work. "The other one is overtime," he says. According to the Department of Labor's Wage and Hour division, Houston employers had nearly 20,000 wage violations just since 2008. And of those violators, full-service restaurants were the second most frequent offenders behind construction companies.

Instead of paying employees the back wages they're earned, Slobin says, most restaurants attempt to shut employees up -- even if it's only temporarily. "These small companies try to say, 'Hey, I know I owe you $1,000 and I'll give you $500 just to go away.'"

It's a strikingly similar situation to what waiter Jeremiah Villarreal alleges happened to him at Ruggles: "Half the time we got [paid] it was just out of desperation," he said. "We were fed up and upset and complaining that we had no money for our bills and needed it. And then when we got the checks, they weren't enough."

As of this afternoon, Ruggles owner Bruce Molzan told the Houston Press that he'd gone through payroll records at the restaurant in light of Saturday night's walk-out. Molzan claims to have discovered that he owes his waitstaff around $14,000 to $15,000 in back wages, which he says will be paid in full today.

Slobin says this too-little-too-late scenario is far from uncommon, especially in Houston. However, he's careful not to paint all restaurants with the same FLSA-breaking brush.

"There are good employers out there," Slobin said. "I know that."



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24 comments
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Cme_smile
Cme_smile

One of the Ruggles staff once got a tip from a doctor for $600, when Bruce found out he called the doctor in front of me and then walked off to talk on the phone. He then came back and told that the doctor wanted the tip to be shared among the waitstaff, kitchen expo and the chefs. I never beleived Bruce, he always thought that servers should share the tips with the kitchen staff even if they didn't have customer intact. Hopefully some servers will remind Bruce that kitchen staff makes an hourly pay not 2.13 per hour.

Cjptunes
Cjptunes

The restaurant industry needs a strong union to force employers to pay agreed upon wages and  to give the employees every tip that is owed them.I worked in restaurants for 30+ years (mostly as a line cook) from central Kansas to New York City. I saw many violations against especially illegals because they have no voice and won't endanger their low ball jobs.There will never be any enforcement of immigration laws regarding  south of the border people because the restaurant owners for one can only keep their profit margin healthy using people they can treat like animals.How could the Ruggles owner afford his current lifestyle if he had to play by the rules?Restaurant workers SHOULD BAND TOGETHER AND FORCE THE FORMATION OF EFFECTIVE UNIONS.Do all restaurants treat their employees like cattle? Of course not. The ones who practice unfair  labor philosophies need to be held totally accountable for EVERY unjust act.

LucyK
LucyK

I have a tipping question if anyone cares to answer... can I leave a tip on a giftcard, or does the server get screwed?  I once had $20 left on the gift card and left it as a tip for the server.  I feel like an ass now, wondering if she never got anything.  (And I will be leaving my tips in cash in the future)

Diningcourt
Diningcourt

Tip stealing is mos prevented by sharing the pot with both wait staff and waiters, many times they were suppos to wait on the customer gets paid for doing nothing. a great resource is diningcourt, is a resource for great restaurant advice

noname
noname

Thank goodness something is being done about this! I worked at Ibiza (another Clark/ Cooper scam) for less than 2 months and quit after I realized how sketchy all of their practices were: tips not accounted for on paychecks, lying about the origins of the meat and fish, and general sleazy behavior on behalf of the management towards employees and customers. I would have reported them, but had no physical proof and wasn't willing to put up with their b.s. any longer to collect proof. Glad to see these employees taking a stand.

Kelli
Kelli

This isn't just restaurants.  When I worked at Starbucks years ago, our store manager would pocket our tips.  Oh yeah, you're a manager at Starbucks and you're driving a brand new Lexus, no suspicion there.  And it was the Town and Country one during Christmas season, those jars were full and overflowing. 

Jack Tyler
Jack Tyler

I stopped in the Starbucks in the International Terminal at Bush a couple of weeks ago.  When I paid for the coffee and scone, I noticed that there was no tip jar. I asked the employee where it was and she said that they aren't allowed to have tips there.  I handed her $5.00.  What the Hell was THAT about? I've never seen a Starbuck without a tip jar (and my east office is the Starbucks near my home at Augusta at Woodway).

ChauncydeF
ChauncydeF

Because a cup of mediocre coffee is $2. And $5 with a little flavored high-fructose syrup and cream. Maybe $6 with a few more flourishes. And more if you factor in the oddities they label as food.

Do you tip $5 to a McDonald's or WhataBurger cashier?

Marty
Marty

Bruce is up to his old tricks again , it is a good Idea to leave tip money in cash when paying by CC.

bibulb
bibulb

Relatives and friends of mine worked at Blythe Spirits/Cecil's over the years, and they're where I learned how the law is basically supposed to work - because the place was exceptionally scrupulous in making sure that everyone was tipped out properly.(One thing I always dug was that during an audit, Kimberly might have been nervous that a mistake was made someplace, but she was NEVER worried that proper practices weren't followed.)

FattyFatBastard
FattyFatBastard

Good to see this being addressed.  Also good to see fellow Bellaire classmate Todd Slobin getting some good publicity.  I'll see if the Ruggles Green owner has any thoughts on this.

Kevin M Clark
Kevin M Clark

FLSA actions look to be growingMore common. Seven were filed in the last three business days. Good for the workers who are fighting back.

Newtg
Newtg

Waiters are widgets. Employees are widgets. Shareholders and investors are the machinery that make it all go. They should be allowed to do whatever is necessary to keep the business alive, and court customers, even if the staff has to volunteer occasionally. 

Guest
Guest

People this stupid DO exist!

Texmex01
Texmex01

I typed and deleted at least 3 paragraphs in response to your post newtg, and nothing seemed to sum it all up as much as just sitting back and letting you just be the idiot that you obviously are....

Hanabi-chan
Hanabi-chan

<sarcasm on="">Hey! Maybe you are onto  something. Since " the shareholders and investors are the machinery that make it all go", how about said shareholders and investors actually work at the restaurant! Bus tables! Wait on rude and demanding customers! Families with screaming children! Drunks! It so brilliant that I wonder why it was never done before. Who needs waiters? I mean, the investors are the smart ones right? Let them show their brilliance by working a Saturday night service.  Since they are being paid with dividends, they can work for free. Think about it, no payroll to worry about, no worries about labor regulations, no worries about mucking up the tip distribution. It is genius I tell you, business school genius! <sarcasm off="">

I take it you never worked as wait staff. My sister did back in the day to help pay for college. Worst job she ever had. My sis is a hard worker, and I can tell you, she worked her butt off at the job, only to be left with miserly tips and rude behavior from customers. She quit when she got a better job. Can't say I blame her. Not everyone who waits tables is so lucky.  You sir, (madam?) are an idiot. </sarcasm></sarcasm>

Hanabi-chan
Hanabi-chan

Just to point out, I was NOT being sarcastic on the second paragraph. You Newtg, are still an idiot.

xxx
xxx

Newtg is obviously a parody of Newt Gingrich, gosh you guys need to lighten up.

Working Stiff
Working Stiff

I didn't know widgets could walk out and refuse to work.

Ali
Ali

Are you Bruce Molzan?

Marty
Marty

Must be Bruce or his slim bag Atty...

guest
guest

Tip stealing is most prevalent where some staff may not have legal paperwork- in situations where employees have no real recourse. RE: Ashland House on Wirt.

Andy
Andy

Tip stealing is very common.  That's why even though I pay the tab with a credit card, I usually leave the tip in cash.

Hanabi-chan
Hanabi-chan

I do the same Andy. If possible, I like to hand the tip the wait staff directly.

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