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Types of Wage Theft That Affect Restaurant Workers

Posted on September 5, 2022 by Legal Team

Wage theft, or when an employer fails to pay workers the amount of money they are owed for hours worked, is a crime that affects thousands of restaurant workers. According to the Economic Policy Institute, more than $3 billion in stolen wages were recovered between 2017 and 2020 alone. Restaurant and service industry workers can face many different types of wage theft, from tip skimming to unpaid overtime. If you believe you are a victim of wage theft as a restaurant worker in Cleveland, you have rights.

Tip Skimming 

Tip skimming is a significant problem in the service industry. It is the illegal practice of an employer or manager to keep a portion of the tips that legally belong to restaurant workers. Tip skimming is most common in restaurants that use tip pooling, where the wait staff (and other employees, such as bartenders, hosts, chefs, and dishwashers) pool all of the tips made and split them evenly at the end of the day. The employer should not receive an unfair amount of this pool.

Failure to Pay Minimum Wage

The minimum wage is the lowest amount that an employee can legally be paid. There is a state and federal minimum wage. State law will trump federal law if the amount is higher, but a state cannot set a minimum wage that is lower than the federal. In Ohio, the minimum wage when an employer makes gross annual sales of less than $342,000 is $7.25 per hour. Tipped workers, however, are paid differently. The minimum cash wage for tipped workers is $4.65, and the combined cash and tip minimum wage rate is $9.30. If an employer fails to pay a restaurant worker at least minimum wage, it is a violation of the law. 

Illegal Deductions 

Wage theft can also take the form of illegal wage deductions, or an employer or manager deducting items or purchases unfairly from a worker’s wages. It is illegal to make wage deductions for required work uniforms, customers who walk out on their bills or cash shortages if the deduction decreases the employee’s wages below the minimum wage or diminishes overtime pay. When the employee has worked overtime, making wage deductions for anything other than board, lodging or recognized facilities is normally not allowed.

Unpaid Overtime

Under the Fair Labor Standards Act (FLSA) nonexempt employees must receive overtime pay for every hour worked over 40 hours per workweek. Overtime pay is a rate of one and one-half times the worker’s normal rate. One form of wage theft occurs when a restaurant owner fails to pay waiters and other restaurant staff for the time they worked over 40 hours per week. Failing to properly track hours worked, making workers clock out and continue working, and paying less than the required time for overtime hours are common examples of this type of wage theft.

Work During Meal Breaks

 In Ohio, state law does not require employers to provide a meal or rest break periods to employees who are 18 or older. Minors must be given an uninterrupted break of at least 30 minutes for every 5 hours of continuous work. Under the FLSA, if the employer does offer a meal break of at least 30 minutes where the employee does not have to work, the employer legally doesn’t have to pay the worker for the break. However, if the employee is required to work during the designated 30-minute break, the employee must be compensated for this time. 

If you are a victim of wage theft as a restaurant worker in Cleveland, Ohio, contact a wage and hour lawyer at Scott & Winters Law Firm, LLC for a free consultation with an attorney to find out how we can help.