"Split Pay" The 20% Rule For Tipped Employees

Tip Credit is a federal law that allows employers to take a 'credit' against the minimum wage, and pay lower wages to employees who earn tips.

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PostPosted: Tue Jan 31, 2017 1:19 pm
tompace wrote:
elric92 wrote:Someone is addressing that woefully inadequate mileage reimbursement, right?


I'm trying to. I contacted the pizzalawsuit.com guys and talked with a mike pontomick (sp?) who said they had already sued PJ recently and referred me to some guy out of new york who never returned my calls. I'm gonna try to get in touch with the McInnes guys who did my Domino's suit and see if they are interested.

This is a questionable suit, since I am paid a good bit over minimum wage in store. Logically to me, it seems like this would be able to be credited to their "debt" to me, but I've never gotten it verified by a lawyer...that's currently where I stand.


Ya, it would be able to be credited, you'd have to figure out how much that credit is worth and then be honest with the attorney up front. There is still likely a kick back that results in your wage falling below minimum though.
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PostPosted: Tue Jan 31, 2017 6:28 pm
Now that I've gotten a couple paychecks, it is easy to see that I'm well above the 20% mark. Initially, I was printing/saving the daily checkout reports, but the paychecks actually show that info in detail, so printing isn't really needed (for me, at least).

I learned that the payroll system doesn't allow us to be paid the exact same amount instore/outstore, so we are getting 7.25 on the road and 7.26 in the store. This means that all the info we need to prove our case is spelled out specifically. I simply took the info off the pay stub and put it into a spreadsheet and here is the result.

Image

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PostPosted: Tue Jan 31, 2017 11:30 pm
RandomUser wrote:Now that I've gotten a couple paychecks, it is easy to see that I'm well above the 20% mark. Initially, I was printing/saving the daily checkout reports, but the paychecks actually show that info in detail, so printing isn't really needed (for me, at least).

I learned that the payroll system doesn't allow us to be paid the exact same amount instore/outstore, so we are getting 7.25 on the road and 7.26 in the store. This means that all the info we need to prove our case is spelled out specifically. I simply took the info off the pay stub and put it into a spreadsheet and here is the result.

Image


That's GREAT!

Now, you have a choice to make. Address this issue now or later. Each decision has their own advantages/disadvantages.

If I remember correctly, you're in Arizona? I suggest you contact a local attorney that specializes in wage & hour litigation. You need to find out the following:

1. Does Arizona have a fee shifting statute for wage complaints?
2. Does Arizona have punitive damages for violations of minimum wage?

If the answer is Yes to both those questions, then you're golden, since you can likely pass the cost of your attorneys on to your employer (the defendant) and look to being awarded double or possibly even triple damages (2x/3x your actual losses)
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PostPosted: Tue Feb 28, 2017 8:56 pm
I spoke with the Arizona labor board today and they have given the company the greenlight to pay $7.25 all the time whether you are on the road or in the store.

When I asked how this doesn't run afoul of the 20% rule they were confused and had no idea what I was talking about. Eventually they realized it's a Federal rule and said they could do nothing about that since they only handle the state's laws.

So now I'll have to ask the Federal labor board about this and I'm beginning to suspect they will say that as long as the company is paying Federal minimum wage ($7.25) during the in-store hours there is nothing they can do as well since the $10 wage is a state law.

So this will probably have to go before a court to see if the Federal rule applies to a state minimum wage that's higher than the Federal minimum wage. But I would really not be surprised to see this spreading as they are very certain they've found a loophole in the law.

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PostPosted: Tue Feb 28, 2017 9:50 pm
AZPizzaGuy wrote:I spoke with the Arizona labor board today and they have given the company the greenlight to pay $7.25 all the time whether you are on the road or in the store.


I am not sure I would use the term "given the company the green light" in this context. It makes it sound like the labor board is being nice to your employer. The labor is not being nice, the labor board is making it clear to your employer that the law will be enforced.

AZPizzaGuy wrote:When I asked how this doesn't run afoul of the 20% rule they were confused and had no idea what I was talking about. Eventually they realized it's a Federal rule and said they could do nothing about that since they only handle the state's laws.


Just curious... what is the name of the investigator that investigated these claims for you? While it may come to pass that your state is not required to enforce this rule, I highly doubt it. You may want to speak to that investigator's supervisor and/or obtain a free consult with a local labor attorney and ask them following questions

"In regards to the the US Department of Labor's 20% rule, must the Arizona Department of Labor enforce this rule?"

"Is the a 'fee shifting statute' that would apply to this issue?" If there is a fee shifting statute, there should be no reason why attorneys would not be willing to take your case, since your claims are basically a slam dunk.

"Does Arizona have a statute similar to RCW 49.46.120." This statute basically means that the most favorable statute applies. So IF Arizona has one of these types of statutes (I have no idea if they do) then it would cause me to believe that it would mean that you could apply the 20% rule from the federal rules, which would then mean your employer, because they are violation of the 20% rule, would have to pay you the full $10/hr for all hours; as long as there continue to violate the 20% rule. It should also mean that you should receive damages for lost wages. Did your State DOL mention that you would be receiving any lost wages?

Also ask "Would my employer be liable for exemplary damages for the past lost wages?"


AZPizzaGuy wrote:So now I'll have to ask the Federal labor board about this and I'm beginning to suspect they will say that as long as the company is paying Federal minimum wage ($7.25) during the in-store hours there is nothing they can do as well since the $10 wage is a state law.


Yes, this might be the case. You really should speak to an experienced attorney that is familiar with Arizona State law and not simply trust the Arizona Department of Labor (or whatever they call it), since you never know if you are dealing with an employee that has a predisposition to rule in the employer's favor by applying the lowest standard of state law.


AZPizzaGuy wrote:So this will probably have to go before a court to see if the Federal rule applies to a state minimum wage that's higher than the Federal minimum wage. But I would really not be surprised to see this spreading as they are very certain they've found a loophole in the law.


Well, you are in luck. Arizona is in the 9th Circuit and their recent rulings in regards to tip credit may be helpful. So I would again suggest you seek competent legal representation. Have you (I cannot remember if it is you that is addressing this issue) spoken to any attorneys yet?
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