Lawsuit Claims Hard Rock Hotel and Casino Atlantic City Failed to Properly Pay Tipped Employees

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Hard Rock Hotel and Casino Atlantic City faces a proposed collective action in which a former employee claims he and other workers were not properly informed of the tip credit to be applied to their wages and are thus owed the full minimum wage.

According to the 12-page case, the hotel and casino’s operator overstepped provisions of the Fair Labor Standards Act (FLSA) that require tipped employees to be properly informed of the tip credit requirements before their employer can claim a tip credit against its minimum wage obligations.

Per the suit, employees are owed minimum and overtime wages as a result of the defendant’s “systemic violation of federal wage laws.”

The plaintiff says he worked as a table games dealer at the defendant’s Atlantic City casino between May 2019 and September 2019. Though the plaintiff was paid a sub-minimum wage, he was never informed of the FLSA’s tip credit requirements, according to the suit.

The case explains that under the FLSA, an employer may only take a tip credit against its obligation to pay employees the minimum wage if the workers are first informed of the tip credit requirements and permitted to retain all their tips, except in situations where a valid tip pooling arrangement has been made between tipped employees.

The defendant’s use of a tip credit, therefore, was improper given workers were not properly informed of the FLSA’s tip credit requirements and Hard Rock’s intended use of a tip credit, the lawsuit argues. More specifically, the suit claims employees were not told the amount by which their wages would increase on account of the tip credit, that all tips received by workers were to be retained by them except in a valid tip pooling arrangement, and that the tip credit shall not apply to any employee who had not been informed of these requirements.

Nevertheless, Hard Rock tipped employees were paid less than the $7.25 federal minimum wage, the lawsuit avers.

“Thus, during Plaintiff’s employment, Defendant failed to properly compensate Plaintiff for all hours worked at a rate equal to at least the required federal minimum wage,” the complaint states.

The case goes on to claim that the defendant failed to properly inform workers in writing each time the amount of the tip credit changed.

Per the suit, Hard Rock’s apparent FLSA violations were “willful” in that the hotel and casino operator either intentionally violated the law’s requirements or showed “reckless disregard” as to whether its conduct complied with the statute.

The case looks to represent anyone employed by the defendant during “the relevant time period” who was paid a direct cash wage of less than $7.25 per hour.

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