Unpaid Overtime for Tipped Employees Attorney in Austin & Houston, TX
Has Your Employer Denied You the Overtime You Earned?
Do you work in a restaurant or a hotel? Do you suspect your employer may not fully compensate you for all of the time you’ve worked or has deprived you of tips that were legally yours to keep? If so, Leichter Law Firm’s unpaid overtime attorneys are prepared to help you get the full and fair compensation you earned. Violations involving overtime hours, recordkeeping, and misclassification often prevent employees like you from getting what you deserve. Below, we explain overtime for tipped employees and how to calculate it.
Don’t let your employer get away with paying you less than you earned. You work hard for your paycheck. The experienced Houston and Austin unpaid overtime lawyers at Leichter Law are ready to get you the compensation you are due. Contact us at (512) 495-9995 today to schedule a free and confidential consultation with us.
What Are Tipped Employees?
According to the FLSA and Department of Labor, a tipped employee has an occupation where they regularly earn more than $30 in monthly tips. Some common examples of tipped employees include the following occupations.
- Restaurant servers
- Casino staff
- Taxi and delivery drivers
- Hair stylists
- Musicians and other entertainers
- Bartenders and baristas
- Hotel staff
- Pet groomers
Remember that, to qualify as a tipped employee, the $30 in monthly tips must be a regular occurrence. If someone does receive tips at their job, but it happens very infrequently, they will not qualify as a tipped employee.
What Is the Minimum Wage for Tipped Employees in Texas?
Every tipped employee has the right to their state’s applicable minimum wage. In Texas, the minimum wage is the same as the federal minimum, $7.25. Employers must meet minimum wage obligations in paying their employees. If they pay the minimum wage for tipped employees, which is $2.13, they must make $5.12 per hour in tips to reach the minimum wage. When tipped employees do not make $5.12 in tips, employers must make up the difference to ensure their employees make minimum wage.
Can an Employer Take Tips from Employees?
No. Federal law prohibits employers from keeping a portion of their employees’ tips. It also prohibits certain employees, such as managers or supervisors, from being included in the tip pool. If you learn that a manager is in the tip pool or has taken tips from the servers, they are likely violating federal law.
Tipped Employees May Qualify for Overtime Pay
It is not unusual for employees to be unsure about their employer’s overtime policies. It is possible that you may not know if you are even eligible to collect overtime. If you have questions about your status or if you feel that your employer has been cheating you out of overtime pay that you are owed, contact a Texas employment attorney right away.
How Do I Know If I’m Entitled to Overtime?
There are two specific categories of employees: exempt and non-exempt. Exempt employees, due to the nature of their jobs, are not eligible to collect overtime. These employees are usually in the executive or administrative ranks, are considered to be highly compensated employees, hold outside sales positions, or have other professional exemptions. The burden is on the employer to prove that the employee belongs in one of these classes. Otherwise, you are likely eligible to collect overtime pay.
Are Tips Part of Overtime Calculations?
The FLSA also allows employers to use a tip credit while calculating overtime pay for tipped employees. A tip credit puts a tipped employee’s earned tips toward wage and overtime obligations for the employer. However, an employer must ensure their employees receive enough tips and wages to satisfy overtime and minimum wage requirements to use a tip credit.
The employer’s tip credit cannot exceed the difference between the regular rate of pay and the federal minimum wage, $7.25. For example, let’s say your employer pays you $2.50 an hour, which is slightly higher than the minimum wage rate for tipped employees ($2.13 per hour). The difference between $7.25 and $2.50 is $4.75, which is the maximum tip credit the employer can take.
Remember, employers must be able to show that the employees make at least the federal minimum wage between their direct cash wage and their tips. Otherwise, the employer makes up the difference when they calculate overtime pay.
Tipped Employee Overtime Calculation
Employers must add direct cash wages plus tip credit earnings to calculate the overtime rate for tipped employees. Let’s break that down a little more.
$2.50 direct cash wage + $4.75 tip credit = $7.25 regular pay rate
$7.25 x 60 regular hours = $435 regular earnings
$7.25 x 1.5 x 20 overtime hours = $72.50 extra overtime pay
$435 regular earnings + $72.50 overtime pay = $507.5 regular earnings plus overtime
If you are still unsure of how to calculate your overtime rate of pay, we recommend speaking with an experienced labor and employment law specialist with our firm. We have extensive experience helping workers find out exactly what they are owed, then fighting for that compensation on their behalf.
Why Didn’t My Employer Pay Me Overtime Wages?
An employer may fail to pay proper overtime wages to eligible employees for many reasons. Sometimes, they will misclassify employees as exempt when they are not, intentionally or unintentionally. Other times, inaccurate record-keeping will not indicate hours that the employee worked over the standard 40-hour workweek.
Regardless of whether the violation was intentional or unintentional, an employer could be held accountable for failing to pay overtime wages. They will likely be required to pay back overtime wages owed to employees like you, and may even be forced to pay additional compensation as a punishment for their actions.
Violations of Minimum and Overtime Wage Laws
It is common for employers to violate minimum wage and overtime laws when paying tipped employees. Common violations include:
- Not providing workers with a paycheck. Some employers do not pay wages, and their servers work solely for tips. This practice violates the Fair Labor Standards Act (FLSA).
- Failing to pay a minimum wage. Your employer can never pay you less than the minimum wage, even if you have a slow shift.
- Requiring you to share tips with employees who do not customarily receive tips. Your employer can require you to share tips with servers, counter personnel, bellhops, bussers, and service bartenders. However, they cannot require you to share tips with managers, dishwashers, cooks, chefs, or janitors.
- Requiring you to give a portion of your tips to the employer. An employer cannot legally keep any portion of your tips for personal gain.
- Not paying overtime for hours worked over 40 in a workweek or only paying time-and-a-half of the server rate and not the full minimum wage. Unless your state has a minimum wage higher than the federal minimum, your employer must pay you at least $10.88 for each overtime hour you work.
- Requiring you to work off the clock. An employer may not require you to do any work without pay.
If you are a tipped employee and your employer has committed any of the above violations, speak with a qualified overtime pay attorney today.
The law requires that all workers are entitled to minimum wage and overtime pay. Employers in the hotel and restaurant industry often violate the law by paying workers below minimum wage and failing to pay overtime. The most common violations are requiring employees to:
- Begin working before their shift starts
- Continue working after their shift ends
- Work during breaks and meal periods
Do I Need A Lawyer To Represent Me?
Absolutely. While you could pursue an overtime claim against your employer by yourself, you risk losing your case and getting nothing at all for your efforts. An experienced overtime wage claim lawyer will know how to investigate your claim, gather relevant evidence, consult with experts, and build the strongest case possible on your behalf. You are more likely to recover the overtime wages you are owed if you have knowledgeable legal counsel.
What Compensation Can I Recover for Unpaid Overtime?
If you do not receive overtime pay that you earned, you can hold your employer accountable for their misconduct. In a successful claim, you may recover the following damages.
- Your regular rate of pay that you are owed.
- Liquidated damages equal to 100% of your unpaid overtime rate.
- Attorneys’ fees
- Court costs
Contact a Hotel and Restaurant Workers Overtime Attorney
If you have been denied your wages or overtime pay, you have the right to file an unpaid overtime claim against your employer. To learn more about what an employment law attorney can do for you, consult an unpaid overtime lawyer at Leichter Law. Our team is dedicated to helping you receive the money you worked hard to earn. Call us at (512) 495-9995 to discuss your legal options and schedule a free consultation.