Food Service Employees: Are You Getting All the Overtime Pay You Deserve Under Texas Tip Laws?

Waiters and waitresses, servers, bartenders, and busboys are among the workers in Texas who are most often shortchanged when it comes to overtime pay. Texas wage and hour attorneys are very familiar with how food service operators use the confusing Texas tip laws to take advantage of their employees. All too often, Houston tipped employees who complain about their wages are threatened with the loss of their jobs—or fired outright.


How you are protected by FLSA

Texas tipped food service workers are covered under the federal Fair Labor Standards Act (FLSA), as well as by the Texas Payday Law. The definition of a tipped worker under those laws includes an employee of hotel, motel, tourist place, or restaurant who regularly receives more than a certain amount in tips; the FLSA specifies $30 a month, but the Texas Payday Law extends the coverage to workers who get $20 a month or more.

Both the federal and state laws set the minimum wage for hourly workers at $7.25 per hour. The FLSA also requires that hourly workers (except a few who are exempt) will be paid at a rate of one-and-a-half times their normal rate for all hours worked over 40 during a given workweek. So for any hours over 40 that a minimum-wage employee works, the appropriate pay rate must be $10.88 or more per hour.

Ah, but there is an exception for tipped employees. There is a special minimum wage rate for all tipped workers, and that rate is currently $2.13 per hour. Basically, it is assumed that the tips the worker receives will be at least enough to make up the difference between that amount and the standard minimum wage.


The biggest scam in food service

Food service employees are often called upon to work long hours, in order to provide coverage for a busy restaurant during parties and holidays. Frequently, that means working more than 40 hours a week. Employers know that most workers don’t understand the Texas tip laws for overtime pay, and that sets up the most common way to take advantage of tipped employees.

“Look,” says Selma, the restaurant owner, to her wait staff. “You guys are getting $2.13 an hour from me. With the party tonight, some of you will be earning overtime. So for those extra hours, I’ll be paying you—hmm, let me check the calculator—2.13 times 1.5; we’ll round it up to $3.20 an hour. And then you get tips, too.”

Selma is ripping off her tipped employees, even if she doesn’t realize it. The correct way to think of it is that an employer gets to apply a “tip credit” of $5.12 an hour to his or her tipped employees’ wages. The law assumes that a Texas tipped food service worker can earn at least $5.12 an hour in tips. For the regular minimum wage for tipped workers, the employer starts with the true minimum wage of $7.25, subtracts the $5.12 tip credit, and ends up with the $2.13 minimum wage for tipped workers.

As we saw before, the lowest wage rate for overtime hours is $10.88. If you subtract the $5.12 tip credit from that figure, you get $5.76 per hour. That is the true minimum wage that employers must pay tipped employees for every overtime hour. If you are a tipped Houston worker who gets only $3.20 per hour, you are being cheated.


Getting what you deserve

The Houston overtime lawyers at Kennedy Hodges are outraged that this happens on a regular basis. We can help get you the overtime pay you earned but never collected, if you have been a victim of this abusive and illegal practice. Oh, and the threats to fire you for complaining about your pay? Those threats are illegal too—they are outlawed by the Fair Labor Standards Act.

We can get you the justice—and the back wages—you deserve. Connect with our office at 888-449-2068 today and we’ll schedule a consultation your case with an experienced Texas wage and hour attorney. Just for your asking, we’ll also give you a FREE copy of our book, The Ten Biggest Mistakes That Can Hurt Your Wage and Overtime Claim.