Chicago Business Litigation Lawyer Blog
The federal Fair Labor Standards Act (FLSA) provides all sorts of rules and regulations to make sure workers are not mistreated by their employers. Two of the most well-known regulations involve overtime and minimum wage.
The FLSA defines overtime as any time spent working after eight hours a day or forty hours a week. It requires employers to pay all their hourly workers one and one-half times their normal hourly rate for all overtime worked.
The FLSA sets the national minimum wage at $7.25 per hour, but each state also has their own labor laws to regulate things like minimum wage. If the state minimum wage is not the same as the federal minimum wage, then employers are required to pay their workers the higher minimum wage. New Jersey, for example, has a minimum wage of $8.38 per hour.
But both the FLSA and New Jersey labor law provide exceptions for employees who earn tips. New Jersey recommends a minimum wage of $2.13 per hour for tipped employees, provided the tips and their wages combined equal at least the standard minimum wage. If the employee’s tips are not enough to bring her total earnings up to minimum wage, the law requires the employer to make up the difference.
James G worked for World of Beer, a sports bar in New Jersey, for almost three years. In that time he alleges the bar paid him $2.13 for each of the first forty hours a week he worked. When James G worked more than forty hours a week, he alleges the bar did not pay him at all.
James G alleges World of Beer cited the legal “tip credit” to keep its employees’ wages low, but failed to tell employees how the tip credit works. James G also alleges the bar did not bother to make up the difference when employees’ wages and tips added together to make less than minimum wage.
Under the law, employers are only allowed to pay their workers the lower minimum wage if they spend at least 80 percent of their time doing work that earns them tips (such as serving customers). Work that does not earn employees tips includes cleaning, taking out the trash, and opening and closing tasks.
According to the relevant labor law, tipped employees who are paid the reduced minimum wage can spend no more than 20 percent of their time at work performing these kinds of non-tipped tasks. Employees who spend a greater percentage of their time on these tasks are eligible for the higher minimum wage, even if they receive tips. This is to give tipped employees sufficient opportunity to earn tips while at work.
Gerard alleges he and other employees at World of Beer were paid the lower minimum wage, even when they spent more than 20 percent of their time on non-tipped tasks.
Many employees endure lower wages when they start working for an employer in the hopes they’ll move up the ranks and earn more money, but Gerard claims the alleged wage shortages continued even after he was promoted. As product manager, Gerard alleges he was paid $400 per week, which is still below the minimum wage.
Gerard is seeking compensation for unpaid wages for straight time and overtime.
Our Rolling Meadows, Palatine and Elk Grove Village wage and hour attorneys and unpaid overtime lawyers and attorneys are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.
Nationwide Consumer Rights is based in Chicago and Oakbrook Terrace. We represent clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago class action attorneys by phone at 630-333-0333 or through our online form.