Let’s Eat Out, Incorporated’s Wage Practices Questioned in Lawsuit

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A proposed collective action has been filed in Alabama against Let’s Eat Out, Incorporated on behalf of all current and former tipped employees who the lawsuit says were not paid proper wages. According to the complaint, the defendant, in alleged violation of the Fair Labor Standards Act (FLSA), “knowingly and deliberately” failed to pay proper minimum and overtime wages by applying an unlawful tip credit to tipped workers’ pay. These employees, the plaintiffs claim, should not have been subjected to a tip-credited pay rate because the defendant reportedly required the individuals to spend more than 20 percent of their work time performing non-tipped duties around the restaurant.

“The FLSA requires that if the cash wage plus the tips are not enough to meet the minimum wage, the employer must top up the cash wage to reach the minimum wage,” the complaint explains. “[The plaintiff] and the Putative Class Members on several occasions would not make enough tips to equal the minimum wage when combined with their cash wage.”

Moreover, the plaintiff alleges the defendant would deduct the cost of unpaid customer meals from tipped workers’ pay and direct members of the proposed collective to work off the clock, further lowering the employees’ wages below the federal hourly minimum.