A legal dispute over tipping at Dat Dog restaurants in New Orleans has become part of a growing national debate not only about how tips should be shared among co-workers, but also about who owns the tips left behind by diners.
Details Surrounding the Lawsuit
A group of Dat Dog employees filed a lawsuit at the U.S. District Court in New Orleans which challenges a required tip-pooling system used by their employer. According to the suit, the tipping system in question splits bartenders' tips with back-of-house employees like cooks and dishwashers and with managers. The lawsuit alleges that the system used by the restaurant is illegal.
The issue of allowing restaurant owners to split servers' tips with back-of-house employees has been scrutinized nationally, thanks in part to a proposed federal labor rule change by the Trump administration.
Federal Fair Labor Standards Act
Under the federal Fair Labor Standards Act, restaurants can pay tipped employees less than minimum wage, as long as an employee earns enough tips from customers to reach at least $7.25 hourly. The law also restricts tip-pooling between fellow tipped employees who regularly interact with customers, and bans mandated tip-sharing with back-of-house employees who are supposed to be paid minimum wage by their employers.
The Dat Dog lawsuit claims that the company’s managers required bartenders Zachary Henderson and Kaleigh Thomas to share their tips with back-of-house employees, constituting an illegal tip pool. The suit alleges the restaurant deducts an amount equal to 5% of the shift's gross sales, not including alcohol sales, from bartenders' wages. The deducted amount is then shared with managers, cooks, and dishwashers who already make at least minimum wage. The employer’s alleged practices were referred to as a “forced wage deduction scheme” in the lawsuit.
According to the lawsuit, “The general manager explained that he wanted to give a raise to the back of house employees but did not have the budget to raise their hourly pay. Instead, he decided to take more money from the service bartenders to fund a raise for the back of house employees.”
Updates From the Lawsuit
As of 1/22/18, Dat Dogs Enterprises LLC. Has not yet filed a formal response in court. Since the lawsuit was filed, five other Dat Dog employees have joined. All of the plaintiffs named in the lawsuit are being represented by The Chopin Law Firm LLC.
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