Attorneys James T. Carey and P. Zachary Stewart

Pursuing your Claims. Protecting your Rights.

Calculating overtime pay for tipped employees

On Behalf of | Apr 21, 2021 | Overtime And Wage Issues

For hourly workers who receive a minimum wage and no tips, it is often easy to calculate how much overtime an employer owes when the employee works more than 40 hours a week. Overtime pay is typically one and a half times the worker’s regular rate. For tipped employees, however, this can get complicated. Employers may pay tipped workers less than the minimum wage as long as their tips bring their average pay rate to the state minimum, which in Pennsylvania is $7.25 per hour and in West Virginia is $8.75 per hour. 

Workers at a restaurant in another state have filed a lawsuit against their employer for wage and overtime violations. They claim that, for more than three years, the employers have forced servers and baristas to pool their tips with back-of–house workers. By law, only tipped employees may share in a tip pool. Additionally, the amount a worker puts into the tip pool may result in the employee earning less than minimum wage. 

Overtime confusion 

Despite paying less than minimum and requiring a tip pool, the employer calculated overtime wages based on the workers’ cash amounts rather than their regular pay. Additionally, the lawsuit claims that the employer did not keep accurate records of the amounts of tips employees received, the premium rates they earned or the overtime compensation the company paid. 

In addition to fair compensation for the back wages they deserve, the employees simply want the restaurant owners to make changes to fix their broken system. This is often one important goal of a wage and overtime complaint. If employers keep careful records, know the law and treat their employees fairly, they often have a satisfied, loyal crew.  

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