tip-jarBartenders at the popular New Orleans watering hole, Pat O’Brien’s, have sued the bar in federal court claiming that managers regularly took money out of  their tip jars, causing them to receive less than the minimum wage. Servers at Pat O’s, like many other restaurants and bars, are typically paid a lower hourly wage, which is then supplemented with tips from customers. In this lawsuit, the two bartenders claim that managers removed hundreds of dollars from the bar tip jars to balance the till, refund customers, or keep.

The suit, filed by New York attorney Lou Pechman, alleges that Pat O’s pays bartenders $5.25 per hour and uses tips to get their hourly wage up to, or above, the federally mandated $7.25/hour. However, the bartenders allege that managers empty the tip jars and pay the bartenders an arbitrarily derived share without letting them know how much was originally in the jars. The Complaint claims that the managers have retained approximately $600 to $1,000 per week in tips that should have been paid out to the bartenders.  The suit further seeks unpaid overtime for busy months. The bartenders claim that they may be scheduled 60 hours a week during that period and have not received the federally mandated time and a half for that overtime.

In addition to the federal claims, the Plaintiffs allege that Pat O’s is liable under the Louisiana state torts of conversion, unlawful deductions, and unjust enrichment. The suit seeks three years of unpaid wages for the named bartenders and asks the court to certify a collective action for the remaining similarly situated servers.

This lawsuit shows why it is essential that service employers, which operate heavily in cash and often have tipped employees, accurately document the payment of their workers.  The Department of Labor has detailed regulations on tipped employees (DOL fact sheet on this issue is linked below) and employers should be careful to comply. Managers should be instructed to keep track of tip jars and other methods of supplementation of wages—especially if the employer chooses to use such methods as a way to get the hourly wage up to the federal standard.