A Colorado class-action law suit filed in federal court has been dismissed with prejudice in a U.S. district court when a settlement was reached between the two parties. The plaintiff, a previous employee of a fine dining restaurant, had filed the class-action wage and hour claim on behalf of himself and two other employees on the grounds that the employer was running a mandatory tipping pool. The wage and hour claim alleged that the tip pool violated the federal Fair Labor Standards Act.
The plaintiff also claimed that while working as a bus-boy at the restaurant he earned less than the Federal Minimum Wage. Paying regularly tipped workers less than minimum wage is legal. However, if a restaurant wants to use the credit against minimum wage salaries, the tip pool must adhere to state labor laws. The plaintiff claimed that only "front of the house" employees such as cashier's, hostesses, and servers were paid from the tip pool. Food prep workers, chefs, bus-boys and dish-washer's were not regularly paid tips even though they participated in the pool.
The defendant claimed that the tip pool was actually a legal "gratuity program" in which the servers pooled their tips and shared them with other employees who had helped them provide service to customers. No details regarding the settlement have been released, but counsel for the defendant says that they are pleased with the outcome and advise that there was no admission of guilt on the part of the defendant. Both sides were directed by the federal judge to pay their own legal fees and court costs.
Except in cases where the employer falls under an exemption such as the one for regularly tipped employees, not receiving minimum wage for hours worked is a violation for which a wage and hour claim can be made. Knowing what your rights as an employee are and how to report violations that you may be experiencing is important. Federal laws and Colorado labor laws require all businesses to post signs in employee areas, advising employees of these rights and showing a contact number to call if you have questions regarding your pay or benefits.
Source: Aspen Times, "Settlement reached in Aspen tip-pool suit," Rick Carroll, June 24, 2013