By: Jonathan Boulahanis
Q: My servers dropped two trays of expensive wine glasses, and I had three tables walk out on my restaurant last night. What am I supposed to do? Can I have the servers pay for these mistakes out of their tips?
A: First, deep breath and remember everyone has those kinds of days. When serving, I once tripped and fell dropping an entire tray of food and standing up covered in cheeseburgers and chili. The 3 year old at the table loved it, but my boss sure didn’t. You shake it off (literally when it comes to chili in your shirt). In my case, my boss wrote it off as an accident. That being said, those “accident” costs add up to management. Remember, restaurants make the smallest profit margin of any business in the country.
When these situations happen to your employees, it is tempting to try to make them share in the loss. This is a dirty little secret in the restaurant industry – some employees are made to pay for the mistakes out of their pockets. However, it is illegal to dock the server’s tips for the walkouts or the broken dishes. While the Fair Labor Standards Act, doesn’t flat out say this practice is illegal, courts have interpreted the language of the statute to determine that the practice is illegal. A federal district court in Texas* held that a restaurant violated the FLSA by improperly deducting servers’ wages for unpaid checks and cash register shortages, and a federal district court in Miami** agreed. Some states, like California, Massachusetts, and New York specifically prohibit charging employees for spoilage, breakage, cash shortages, or losses.
So what is an employer to do? Remember, First, avoid the tip docking practice. Aside from the wage and hour issues outlined above, the practice could also open up the establishment to liability for discrimination or retaliation if some employees are treated differently. The safer way to handle the situation is to have a progressive discipline policy in place, with the same punishment for employees that are repeat offenders, such as changes to the schedule, loss of a shift, or in extreme circumstances - termination.
Jonathan
* Bernal v. Vankar Enters., 579 F. Supp. 2d 804, 810 (W.D. Tex. 2008).
** Brennan v. Haulover Shark and Tarpon Club, Inc., No. 74-1276-Civ., 1986 WL 587 at *16 (S.D. Fla. Jan. 27, 1986).
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
*This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
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