Class Action Says Prime Valet Took Illegal Tip Credit, Violated FLSA

New to ClassAction.org? Read our Newswire Disclaimer

A class action out of Texas claims Prime Valet and its owner violated the Fair Labor Standards Act (FLSA) by taking a tip credit to which they were never entitled. Under the FLSA, a tip credit allows employers to include the amount in tips an employee receives when calculating the worker’s wages. Two benchmarks must be met in order for employers to be able to take a tip credit: 1. The employer must disclose to the employee that they will take a tip credit; and 2. Tipped workers must keep all tips they receive, with the exception of those in a tip pool with other employees.

The lawsuit claims the plaintiff—a former valet driver responsible for parking and retrieving vehicles—was not provided with an hourly wage. Because his pay came entirely from tips, the plaintiff claims he was denied the $2.13 federal tip-credit minimum wage. Worse, the lawsuit says the plaintiff often had to pool his tips with management, who were non-tipped employees.