Waffle House Owes Tipped Workers Unpaid Wages, Lawsuit Alleges [DISMISSED]

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A proposed collective action alleges Waffle House has unlawfully paid tipped employees a sub-minimum wage rate without satisfying the strict federal requirements for doing so.

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The 18-page case relays that the Fair Labor Standards Act (FLSA) outlines certain requirements for an employer who intends to take a tip credit against its obligation to pay workers the full minimum wage, specifically by using a portion of a worker’s tips to make up the difference between their sub-minimum hourly rate and the minimum wage. According to the suit, Waffle House, who operates restaurants in at least 14 states, has failed to provide workers with certain required disclosures and ensure that its servers are paid in accordance with the FLSA.

“Given that Defendants failed to comply with the requirements to take the tip credit, Defendants has [sic] lost the ability to claim the tip credit and owe Plaintiff and the Class Members pay at the full minimum wage rate per hour for all hours they worked for Defendants,” the complaint alleges.

The lawsuit more specifically alleges that Waffle House has unlawfully failed to inform its tipped workers of the following caveats prior to applying a tip credit to their wages:

• The amount of cash wages to be paid to them;
• The amount by which their wages will increase as a result of the tip credit;
• That all tips received by the worker must be retained by that worker except for tips contributed to a valid tip pool;
• That the employee’s hourly rate must not drop below the tipped minimum wage; and
• That the tip credit does not apply to any employee who does not receive notice of these provisions.

The case further alleges that Waffle House made illegal deductions from employees’ wages by requiring them to purchase uniforms, including pants and shoes, without reimbursement. According to the case, the unreimbursed costs of required uniforms caused workers’ wages to fall below the minimum hourly rate for tipped employees.

The suit goes on to claim that Waffle House servers were unlawfully paid at a sub-minimum rate for non-tipped work unrelated to their tipped jobs, including bleaching tables; cleaning the kitchen, bathrooms, walls, doors, floors and refrigerators; doing dishes; and taking out the trash.

Moreover, workers were unlawfully required to spend more than 20 percent of their time on non-tipped side work that was related to their tipped duties, such as setting up and cleaning tables; wiping booths; refilling condiments, sugar and salt and pepper; rolling silverware; making tea and coffee; and restocking the wait station, the lawsuit says.

According to the case, servers had no opportunity to earn tips while performing this side work yet were still paid at the sub-minimum tipped rate. The lawsuit alleges that although Waffle House had the ability to track the amount of time workers spent on non-tipped work, it did not do so.

The case argues that because managers were eligible to receive bonuses based in part on meeting labor cost targets, there was an incentive to keep wages low for tipped employees.

The plaintiff, who worked as a server at a Houston Waffle House from March 2015 to January 2022, claims that because of the restaurant’s failure to adhere to the FLSA’s tip credit requirements, it is obligated to pay servers at the full minimum wage.

The plaintiff looks to represent all current and former employees who worked for defendants Waffle House, Inc. and WH Capital, LLC for at least one week during the past three years to the present.

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