Last week, an Arizona restaurant called Amy’s Baking Company went viral for all the wrong reasons. Amy’s had been featured on Kitchen Nightmares, the Fox reality show on which celebrity chef Gordon Ramsay swoops in to save poorly run restaurants. The episode featuring Amy’s was notable for being the first time Ramsay had ever prematurely abandoned his effort to help—he found the owners too combative and resistant to change.
Amy’s PR problem worsened when the owners appeared to attack their critics on their Facebook page; later they claimed hackers were responsible.
We are interested in this story because Amy’s is accused of stealing tips from their wait staff. On Kitchen Nightmares, viewers learned that Amy’s pays their servers an hourly rate while pocketing their tips.
It is common—and legal—to pay tipped employees an hourly rate below minimum wage, as long as the workers’ tips make up the difference. This is known as a tip credit. Amy’s Baking Company’s practice is much less common, and probably illegal. A local Arizona news station called the Department of Labor to clarify:
“DOL regulations make clear that under the Fair Labor Standards Act tips are the property of the employee whether or not the employer has taken a tip credit,” said [a DOL representative] in an email. “An employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit, for any reason other than as a partial credit against its minimum wage obligation to the employee or in furtherance of a valid tip pool (i.e., a pool including only customarily and regularly tipped employees).”
It isn’t every day that reality TV provides lessons in labor law.
We wrote recently about the increasing numbers of fast food workers who are striking for a living wage. The Nation points to an eye-opening survey: 84 percent of New York City fast food workers report experiencing “some form of wage theft” in the last year. Fast Food Forward, the campaign supporting the strikes, describes typical violations:
[E]mployees working, without pay, before or after their shift; employees working overtime without being paid time-and-a-half; employees working during their breaks or not receiving breaks; and delivery employees not being reimbursed for expenses like gasoline or safety equipment.
The Nation reports that the New York Attorney General is investigating these claims.
If you have questions about the Fair Labor Standards Act, minimum wage laws, or other employment-related legal matters, contact us today.