An editorial in the NY Times from March of 2018 highlighted the perceived injustices of pay practices in the restaurant industry. They focused on the most commonly recognized issue of payment at rates below the standard minimum wage levels for tipped employees in states that allow such practices.[1] But while these practices are explicitly authorized under many wage laws, the restaurant industry is rife with other pay practices that do violate employment law at the local or federal level.

A 2014 report by the Economic Policy Institute (EPI) cited statistics from the U.S. DOL Wage and Hour Division (WHD) that 83.8 percent of investigated restaurants from 2010-2012 had some type of violation.[2] That number is staggering. Varieties of institution-level policies to steal wages from employees abound.  Some examples include:

  • Mandatory tip reallocation/deduction/confiscation;
  • Forcing employees to repay employers for wages paid through their paychecks;
  • Payment of wages over a certain amount each week in cash to avoid overtime pay and/or additional wage withholding;
  • Refusing to pay overtime at all;
  • Deducting pay for things like food waste, spillage, or equipment breakage;
  • Time sheet manipulation; and
  • Compelling employees to work after punch-out or before punch-in.

Each of these practices plainly violate Minnesota law governing pay practices. And while the laws governing pay practices vary from jurisdiction to jurisdiction, most states have some variation of these protections.

A recent article in the Twin Cities Daily Planet illustrates just how prevalent these practices are in the industry, even at the local level in Minnesota.[3] These practices may result in minor thefts of wages for individuals each pay period, but over time and across hundreds or thousands of employees throughout the country, the amounts quickly add up and reveal a substantial problem that reaches across the nation.

And the food service industry is not alone. Assuming the problem exists generally across similar low-wage positions, a 2009 study by the Center for Urban Economic Development, the National Employment Law Project, and the UCLA Institute for Research on Labor and Unemployment determined that this issue could result in lost wages for more than 30 million American workers, with an estimated total wage loss of approximately $50 billion dollars each year.[4]

The good news is that most jurisdictions with laws covering these practices impose heavy penalties on employers for violations. Locally in Minnesota, for example, employees can initiate claims to recover twice the amount of certain wrongfully withheld wages, and twice the amount of wages on payroll records that employers have manipulated.[5] These claims also generally allow for the recovery of attorney fees.[6]

Further, the Department of Labor and Industry investigates complaints of wage practice violations and can also help obtain reimbursement for many workers. Similarly, the legislature is currently considering enhanced “wage theft” laws that more strictly impose criminal liability for employers who engage in such illicit practices.[7] Such a move may help make many employers think twice about implementing such policies.

The bad news is that many employees are understandably afraid to confront their employers. They fear retaliation directly in the form of discipline or termination, or fabricated or exaggerated reports to the police, or communicating their location to immigration authorities. And these risks do exist to varying degrees. But such retaliatory practices are also illegal in response to an employee attempting to assert his or her rights. And the less that employees stand up for themselves and act to hold employers accountable, the more employers will engage in such practices and further victimize workers.

If you are being subject to unfair pay practices, including being denied wages for regular pay or overtime, or if an employer is manipulating your payroll records, then contact Wilson Law Group today. Our experienced employment practices team is ready to help you protect your rights, receive the compensation you are owed for unpaid wages or because of manipulated records, and deter employers from continuing such practices.  Similarly, if you are an employer concerned about maintaining proper policies to avoid the risk of significant fees and penalties, plus burdensome investigations or litigation, contact the attorneys at Wilson Law Group.