Steak N Shake Violations with Tipped Employees FLSA, Ohio Class Action

Employers may sometimes pay tipped employees, such as waiters and bartenders, less than minimum wage. However, in order to do this, they must obey the requirements of the tip-credit provisions of the Fair Labor Standards Act (FLSA) and state and local labor laws. In this class action, the complaint alleges that Steak N Shake, Inc. does not follow the FLSA tip-credit requirements and provisions of Ohio Minimum Fair Wage Standards Act (OMFWSA).

The FLSA Collective Class for this action is all current and former tipped employees who worked for Steak N Shake for at least one week between June 21, 2018 and the present.

The Ohio Class is the same, except that the work must have been performed in Ohio.

Employers must tell employees in advance that it is using the tip-credit provisions. The complaint says this means they must tell tipped employees several things: (1) the amount of cash to be paid; (2) the amount by which the employees’ wages are increased because of the tip credit; (3) that the employees keep all tips received except for those that go to a valid tip pool; and (4) that the tip credit will not apply to any employee who isn’t given such notice.

Also, the complaint claims, “an employer cannot require its tipped employees to perform non-tipped work that is related to the employees’ tipped occupation but exceeds 20 percent of the employees’ time worked during a workweek.”

The complaint alleges that, in reference to the plaintiff in this case, Betsy Ramos, and other employees, Steak N Shake has violated all of these requirements:

It did not correctly give employees the information it was required to give them.

It made illegal deductions from employees’ pay that reduced their direct hourly wages below the minimum hourly wage for tipped employees. This is because Ramos was required to buy certain clothing for the job.

It required employees to perform work not related to the tipped work, for example, the complaint says, “cleaning ledges, cleaning the kitchen, cleaning walls, cleaning window blinds and windows, dusting the ceiling fans, cleaning bathrooms, and washing trays and silverware.”

It required employees to perform untipped work for more than 20% of their working hours. The complaint records this work as “cleaning and stocking the serving line, cleaning booths, cleaning chairs, cleaning menus, cleaning soft drink dispensers and nozzles, cleaning tables, filling and cleaning ketchup and syrup bottles, filling and cleaning salt and pepper shakers, stocking ice, sweeping floors, rolling silverware, and taking out trash.”

The complaint alleges that Steak N Shake “has lost the ability to use the tip credit and therefore must compensate [Ramos and other employees] at the full minimum wage rate, unencumbered by the tip credit, and for all hours worked.

Article Type: Lawsuit
Topic: Employment
Tags: Employment Violations, FLSA, Tipped Employees