For wait staff at a restaurant, tips are not only welcome, but essential for maintaining a living wage. That is because many restaurants do not pay their servers a minimum wage, requiring a server to make up for it in tips received from customers. Under the Fair Labor Standards Act (FLSA), this is known as a “tip credit” and is legal. The employer can take a tip credit that amounts to the difference between wages paid and the minimum wage. The minimum an employer can pay a server is just $2.13 an hour. Otherwise, the employee has control of all of his or her tips, unless the employees voluntarily choose to form a tip pool, where their tips are mixed together and redistributed among the wait staff. “Voluntarily” is the key word. There has been a lot of controversy over which employees get to participate in the tip pool, often requiring an Illinois wage and hour attorney to step in.
In Turner v. Millennium Park Joint Venture, LLC, plaintiffs accused the defendants of improper tip pooling under the FLSA, and of violations of Illinois wage laws. The plaintiffs, Paul Turner and Andrew Warren, worked as servers at Park Grill at Millennium Park from 2008 until early 2010. All servers were expected to “provide patrons with a great dining experience.” Their duties included taking orders, handling checks, and set-up functions such as rolling silverware. In return, servers were paid 60% of the state minimum wage and received the other 40% covered under tip provisions in the FLSA and the Illinois Minimum Wage Law (IMWL). Servers each contributed a portion of their tips to a general Park Grill tip pool. The plaintiffs charged that the tip pool was only meant for regular servers, and therefore excluded one employee whose sole duty was to roll silverware. They based their claim on an FLSA provision that stated that tip pooling was permitted “among employees who customarily and regularly receive tips.” To the plaintiffs, that description applied only to servers who interacted with the customers.
After examining the FLSA, Judge Milton Shadur of the Northern District of Illinois disagreed with the plaintiffs’ interpretation. In his view, the evidence suggested the opposite: it was perfectly fine for servers to share tips with other employees who helped them serve the customers, even if they never interacted with the customers. Only those who did not normally receive tips — such as janitors or chefs — could not participate in the tip pool. Since the silverware roller performed a job that would otherwise be done by a regular server, he was helping the servers serve the customers.
Furthermore, the Park Grill serving staff in 2006 had unanimously voted to hire a silverware roller. This, and the fact that the silverware roller had participated in the tip pooling through 2010, suggested an agreement existed that the silverware roller should receive tips. It was unfair of the plaintiffs, who benefited from having a silverware roller on staff, to deny the silverware roller his share of compensation. Judge Shadur described the plaintiffs’ efforts as “chutzpah” and found in favor of the defendant.
The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including vacation pay, overtime, meal breaks, and tips. We have offices in Oakbrook Terrace and Chicago, Illinois. Contact an Oak Park wage and hour attorney at the Chicago Overtime Law Center today at 312-869-4095.