Articles Posted in Tips

tipsAmong the most active and quickly evolving areas in wage-and-hour law is liability associated with the misappropriation of tips. Under federal law, employers are permitted to pay workers in tip occupations an hourly wage, minus the prevailing minimum wage, for it is assumed that the lower hourly wage will be offset by the tips earned by the employee.  Given that tips make up a substantial portion of these employees’ wages, many will take issue with tips being co-opted by employers for other purposes. For instance, in a recent decision, Malivuk v. Ameripark, LLC, an Atlanta federal district court resolved a motion to dismiss in an action brought by a group of valets, arguing that their employers committed minimum wage violations by using money gathered from tips to offset other business expenses.

This action was brought against Ameripark, LLC, a limited liability corporation that provides valet services to businesses throughout the Atlanta metro area. A valet employed by Ameripark alleged that although she and other similarly situated employees were provided an hourly wage, they were unlawfully denied wages under both federal and state laws because Ameripark pooled the tips received by valets from customers and appropriated some of the tip funds for business purposes other than compensating the valets. The plaintiff brought suit against Ameripark. Following the initiation of the action, Ameripark moved to dismiss the complaint on the grounds that the plaintiff did not state a valid wage claim under federal law and that the state law claims also failed because they were dependent on the plaintiff stating a valid federal wage claim.

Continue reading