The damage from wage theft to restaurant workers: much more than a few coins

Rubén Rosalez | Regional Administrator for the Western Region US Department of Labor Wage and Hour Division
Photo Credit: fxquadro / Freepik

At the US Department of Labor, we recognize the importance of restaurant and food service workers. These workers have been significantly affected by the pandemic and continue to play a vital role in our local economies.

As we commemorate Labor Day on September 4, the department’s Wage and Hour Division honors the contributions of workers in the restaurant and food industry, and highlights the damaging effect of wage theft on the entire industry.

Federal law requires that most workers be paid at least the federal minimum wage for all hours worked and overtime when they work more than 40 hours in a workweek. Under federal law, employers of tipped workers can pay $2.13 per hour in direct wages if that amount, combined with tips received, equals at least the federal minimum wage. In addition, employees who receive tips must keep their tips entirely, except to the extent they participate in a valid tip pool. Customers trust that restaurant operators ensure that tips go directly to the workers who earned them, and workers expect to be paid in accordance with the law.

Unfortunately, violations of federal minimum wage and overtime laws by restaurant and foodservice employers are all too common. Many workers live from paycheck to paycheck and rely on their full salary and tips to cover their needs. However, the Wage and Hour Division routinely finds that employers make illegal deductions from workers’ wages, withhold tips, do not pay overtime or all hours worked. Unfortunately, some violations are deliberate and committed by unscrupulous employers who try to mask their illegal wage practices by manipulating payroll documents or intimidating workers. Whether intentional or inadvertent, these violations have a significant impact on workers who receive some of the lowest wages of all job sectors.

The Wage and Hour Division prioritizes compliance with labor standards in these sectors. Since 2018, division investigators have recovered more than $20 million in wages and damages for more than 14,000 restaurant workers across the country whose employers failed to pay them their full wages, including hard-earned tips. These workers, whose tips from customers often exceed the rest of their wages, were denied significant income on which they and their families depend.

On Labor Day 2023, we ask workers, customers, and employers to remember these three fundamental ideas:

  • Every worker in the United States has labor rights, no matter where they are from.
  • Tips are owned by the employees who earn them.
  • Restaurant owners or managers cannot participate in a tip pool.

The Wage and Hour Division does not tolerate wage theft. Through rigorous law enforcement, extensive outreach, and technical assistance to employers, the division works tirelessly every day on behalf of workers to recover earned wages and hold employers accountable for violating federal labor laws.

On Labor Day, our nation celebrates the bravery of workers who stood up, fought injustice in the workplace, and helped enshrine their rights into law.

Restaurant and food service workers, and all workers, have minimum wage, overtime, and tip protections under federal law, and their ability to assert those rights without fear of retaliation is also protected.

The Wage and Hour Division accepts complaints and provides guidance and technical assistance. Calls can be answered confidentially in more than 200 languages ​​at 866-4US-WAGE (487-9243). Assistance is also available through the Employment Education and Outreach Alliance, known as EMPLEO, which operates the toll-free multi-state hotline 1-877-552-9832 for Spanish-speaking workers with workplace problems.