For many in the service industry, tips are a vital part of the pay structure. A tip for a job well done accounts for a large percentage of each worker’s take-home pay, and the loss of that income can be devastating. Unfortunately for many workers, taking a portion of the tips from servers is a common practice for unscrupulous management officials looking to pad their bottom line. It’s a practice known as wage theft.
Alleged wage theft was at the center of a recent lawsuit here in Montana, where a worker at a Hilton Garden Inn took issue with her employer’s policies towards tipping. The issues began after the hotel came under new management. The new management announced that the automatic tip for large parties – previously set at 18-20 percent – would be renamed a “service” or “setup” fee. The management would collect this fee, and individual workers would no longer be allowed to accept gratuities. The rule change was enforced through a policy that all workers were told to sign. Though each worker was given a raise, the amount didn’t even come close to compensating workers for the revenue lost through gratuities.
The woman, a former manager, filed a lawsuit against the company. She claims she was pressured to leave the company after she told her supervisors that she thought the tipping policy violated Montana wage laws. She is suing for wrongful termination and she has asked the court to declare the hotel’s practices illegal. According to the woman’s lawyer, the management admitted that “they do not provide the 20 percent arbitrary fee to the non-management staff members.” According to the attorney, “The question then becomes one of law.”
Wage theft is a serious issue that can affect a worker’s long-term prosperity. If you believe you have been the victim of wage theft, the attorneys at Tipp & Buley are ready to assist you. Backed by more than 50 years of legal experience, our lawyers will work closely with you to build an effective employment law case. To schedule a consultation at our Missoula law office, call 406-812-7634 or visit our website.