According to Al.com, a lawsuit filed in January against a Hooters restaurant in Birmingham has been resolved, pending court approval. The lawsuit was filed on behalf of four current or former employees, all females, alleging that they were required to participate in an invalid tip pool that included non-tipped employees. This activity allegedly resulted in a violation of the Fair Labor Standards Act. The FLSA permits restaurants to pay an amount below the federal minimum wage of $7.25 an hour to employees who receive tips. The lawsuit alleged that the 4 employees, who were paid $2.13 an hour, were required to spend 20% of their time on non-tip-producing activities. Hooters maintained that although they had a policy of tip sharing with “Staff Guys”, that practice was discontinued in 2012. According to the proposed settlement, which must be approved by the Judge handling the case, Hooters has agreed to pay the 4 plaintiffs a total sum of $20, 035, and pay $18,000 to the law firm representing the plaintiffs.
Practice pointer. This case is just another example of the many FLSA lawsuits being filed in Federal Court on a regular basis, in Birmingham and around the country. FLSA claims are often difficult for employers to defend without solid proof as to the hours worked by the employees and the amount of wages paid to them. Also, as evidenced in this case, the amount of attorney’s fees is often close to or in excess of the amount awarded to the plaintiff(s) in back pay. Employers should examine their wage policies and procedures on a regular basis to insure compliance with federal law.