While restaurants struggle to stay open in Houston and other parts of the country, shifting their hours of operation to comply with health regulations or to manage operations with fewer workers, employers are sometimes unaware of these laws or will ignore them altogether. These wage violations misuse FSLA exemptions or misinterpret minimum wage and overtime requirements for their bartenders and servers, misapplying tip credit or tip pooling.

Tip-pooling and other wage violations in Texas

Because employers often either do not understand how tip income works in order to comply with federal and state law, or intentionally withhold or misinterpret the provisions, it is important to know what protections there are for food service workers in the Lone Star State.

Some frequent wage theft violations can occur when the employer:

• does not cover the difference between hourly wages and minimum wage. Food service workers must receive the federal and state minimum wage of $7.25 per hour. The employer may pay workers an hourly minimum of $2.13 as long as at least the remainder, or $5.12, comes from earned tips. If earned tips do not cover the difference, Texas law requires the employer to cover the difference.
• charges a service fee on earned tips.
• withholds tips when the worker did not agree to a tip-pooling arrangement
• delays paying tip income, citing credit card payment delays.
• does not pay minimum wage to a worker who works both in a tipped position and a nontipped position.
• does not calculate the base rate when applying time-and-a-half

Knowing your rights and fighting for them

When it comes to wage theft or wage and hour disputes, many workers either fear they will lose their job or that they will face retaliation or discrimination from the employer if they question their pay. It is important to know that there are laws in place and a legal process that allows workers to address unfair labor practices.

Although employees are classified either as exempt or nonexempt under these laws, employers do not always understand how the law applies to some job titles or duties. Other abuses can include meal break, tip pooling or other wage violations that, if proved, will hold the employer liable for the employee’s backpay as well as fines and other penalties.

Federal and state law

Under the Fair Labor Standards Act (FLSA), the federal government has set minimum wage, overtime, recordkeeping and youth employment standards that affect nonexempt workers in both the private sector as well as in governmental employment. Among the categories covered are:

• Federal minimum wage of $7.25 per hour. Where there is a difference between federal and state minimums, employees are entitled to the higher wage.
• Overtimes laws of one and a half times above the regular rate for nonexempt employees
• Child labor provisions prohibiting employment of minors under conditions that are unacceptable to their health or well-being

The FSLA also provides guidelines on what employment is exempt or nonexempt from overtime pay. Nonexempt employees are often misclassified and are thus denied overtime and other pay.

There are complicated overtime, wage and tip pooling provisions for restaurant servers that are regulated under the Texas Payday Law. If an employer violates the law, they can face penalties and must compensate the worker for lost wages. Some of these provisions include:

• A worker who earns $20 or more per month in tips is entitled to a minimum wage of $7.25 per hour. If their tips do not cover the difference between the employer’s pay of $2.13 and this minimum, the employer must provide the difference.
• A worker is entitled to keep all tips unless there is a tip pooling arrangement, and he or she is also entitled to $7.25 per hour.
• A worker who works in both a nontipped and tipped position is entitled to $7.25 per hour in both capacities.

Because wage and overtime laws are complex and often misunderstood, employees may   not realize that they have been victims of wage theft. If you suspect that your employer has violated your rights, it is wise to seek out skilled legal advocacy serving the Houston area that will help you achieve the results you deserve.

Every year, thousands of workers experience pay issues. Recently, more than 70 truck drivers in Texas came forward after alleged payday violations. If your employer is withholding wages or not paying you on time, you have the right to a payday claim.

How Texas payday laws protect you

Texas implemented worker protections, including the Texas Payday Law as a way to ensure employers uphold their end of employment agreements. The law includes commissions, bonuses and wages of many kinds.

Under the laws, you can hold your employer accountable. The process is complex. However, in simplified terms, filing a claim works like this:

• An employee submits a notice that their employer failed to compensate them for their work.
• The Texas Workforce Commission (TWC) opens a case file and begins an investigation
• The TWC reviews your case and holds a hearing for you to offer evidence and for your employer to respond to the claim
• Then, you will receive a ruling on your case

Because the hearings involve witness interrogations, evidence and many procedural steps, you likely should hire an attorney.

Why file aclaim?

Many workers hesitate to file a claim—either because they think that they have waited too long or that their employer will retaliate. It is true that you only have 180 days from they payment due date to file, but you are entitled to compensation, and state law prohibits retaliation. It is worth it to find out your options and to talk to someone who can advise you personally.

The study focused on 10 states with the highest populations, including Texas, but researchers say the total impact is likely closer to $15 billion when factoring other states into the equation.

How do companies steal money from their employees?

Wage theft can take many forms when employers fail to pay workers their legally entitled compensation, including:

• Not paying workers the minimum wage
• Failing to pay overtime to nonexempt workers
• Denying workers meal breaks
• Asking or demanding that employees do not report time worked before or after their regular shifts
• Confiscating tips
• Not paying tipped workers the difference between tips and the minimum wage
• Misclassifying some workers as independent contractors
• Illegal deductions from paychecks
• Not distributing pay stubs outlining deductions

Minimum wage workers are hit the hardest

The EPI study concludes, on average, workers earning the minimum wage are cheated out of $64 each week – amounting to a $3,300 hit for those working year-round. Overall, these workers lose nearly one-quarter of their earnings, receiving average annual wages of $10,500. In Texas, workers are hit harder as those working minimum wage jobs are cheated out of nearly 30% of their pay.

Wage theft is an equal opportunity violation

While the study says younger workers, immigrants and people of color are more likely to report being underpaid, the majority of people hit by wage theft are native-born U.S. citizens under age 25. Nearly half are white and half work full-time jobs, while a quarter of them have children.

Basic protections are outlined in 1938 law

The Federal Labor Standards Act (FLSA) mandates basic protections for workers with regards to pay and hours worked. The law was updated in 1966 and 2015 to extend protections, but the EPI concludes the law has not kept pace with changes to the economy and employment practices.

Additionally, the report says employers have adopted procedures, such as hiring contractors for various functions that were previously done by in-house workers, which skirt employment laws and weaken protections for those workers.

The source of this confusion is the fact that the first requirement for most employees to be exempt from the overtime requirements of the FLSA is that they be paid by salary. However, once an employer meets this initial salary requirement, they must also meet a threshold amount of pay. This threshold amount of salary has historically been $23,660 annually. Effective December 1, 2016, however, this threshold amount will increase to $47,476 annually for a full-year worker.

Additionally, once an employer meets the threshold amount of salary, the job duties of the particular employee must also meet one of the duties tests pursuant to statute. The three main tests of duties for an employee to meet in order to be exempt from the overtime requirements of the FLSA are the Administrative test, the Executive test and Professional test. Thus, unless an employee’s job duties fall within the required duties of one of these tests, an employee must be paid overtime regardless of whether they are paid by salary.

Besides these three primary categories for exemption from overtime, there are others. These others include a creative professional employee exemption, a computer employee exemption, an outside sales employee exemption, and a highly compensated employee exemption. For specifics on these and other categories for exemption from the FLSA, consult your employment law specialist. But also remember, these duties tests refer to an employee’s actual duties not an inaccurate listing of duties portrayed in an outdated or form job description. Thus, if an employee’s actual duties don’t meet the requirements of one of the duties tests, the employee is entitled to overtime pay.

General Requirements of the Three Primary Duties Tests

The general requirements of the Administrative Duties Test are that the employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and the employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

The general requirements of the Executive Duties Test (commonly known as the managerial exemption) are that the employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; the employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and the employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

The general requirements of the Professional Duties Test (also known as the learned professional employee exemption) are that the employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; the advanced knowledge must be in a field of science or learning; and the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.