By: Kristen M. Myers and Kimberly S. Phillips
Most employers, including restaurant establishments, must abide by the Fair Labor Standards Act (“FLSA”), which is a federal law that imposes standards for the payment of minimum wage and overtime. Some employers as well as employees are exempt from the FLSA. In addition to the FLSA, there are also state laws that must be followed. Some states have laws that mirror the FLSA, whereas other states have stricter laws that must be followed.
For example, since 2009, the FLSA has required employers to pay employees at least $7.25 per hour. In comparison, Ohio requires employers to pay employees at least $8.15 per hour (as of January 1, 2017). This is because the FLSA sets the minimum rate at which an employer may pay its employees, and each state is then permitted to impose the minimum rate as set by the FLSA or impose a higher minimum rate. This is exactly what Ohio has done.
If you are reading this and, for example, work in the restaurant industry, you may be thinking “Wait a minute; I am paid much less than $7.25 per hour.” Being paid less than minimum wage is actually legal, so long as the employer follows certain rules. Specifically, restaurant employers may pay waitstaff employees less than minimum wage, but only if the employees are considered “tipped employees.” To be considered a “tipped employee,” the employee must customarily and regularly receive more than $30.00 in tips each month. If the waitstaff employees are considered “tipped employees,” then the tips earned by these employees are viewed as being added to their hourly pay, with the understanding that the tips bring the employees pay up to or above the minimum wage ($8.15 in Ohio; $7.25 in Kentucky). If waitstaff employees do not customarily and regularly make more than $30.00 monthly in tips, then the employer cannot pay its waitstaff employees less than minimum wage for each hour worked. If an employee is not paid in accordance with the FLSA or state law, then the employee has the right to seek recovery of unpaid wages and other relief.
Whether you are an employer or an employee, Beckman Weil Shepardson can assist you in determining whether you are either paying your employees or being paid in accordance with the FLSA and state law. If you believe your rights have been violated by your current or former employer, or if you are an employer who wants to ensure compliance with the FLSA and state laws, please contact one of our attorneys who has experience in this area:
Kristen M. Myers
Kimberly S. Phillips
Peter L. Cassady