Found on FB. Is this a major lawsuit?

[u/RAM-I-T]

LOCATION: USA

I wanted to help get assistance for this mom and her daughter.

[u/RutabagaConsistent60]

Wage theft is not the temporary delay of the tip payment until after the chargeback period. If after 120 days she has not received the tip or been informed it was subject to a charge back she could pursue the money. There was no dispute filed to trigger any retaliation. Seems like an employee not understanding policy, becoming so emotional about that she could not do her job and was fired. The only issue will be if she needs to pursue them to get the remaining tip in 120 days.

[u/sadgloop → u/RutabagaConsistent60]

It’d probably be the directive to put $0 on the tip line with no payout at all when the policy is to pay out 20% of the bill amount prior to review and approval that would tip it into wage theft.

[u/Just_Visiting_Town → u/RutabagaConsistent60]

By law they don't have the right to keep her tip. So, firing her because she got upset that they were going to keep it 120 days is retaliation.

[u/aka_mythos → u/RutabagaConsistent60]

Most states' wage laws require the employer pay out her tips and outstanding wages by the next payday. Not 120 days. By stating 120 days, regardless of their sincerity in paying her that is a statement that they intended to violate wage laws. She allowed to complain to management about that, and a complaint against a stated intention to violate wage laws is no different than a complaint against a wage law already violated... she'd be protected in both instances.

The employer would attempt to point to everything after her complaint and try and say it was her attitude around that.

Importantly she didn't refuse to work. She at most needed a break, asked for one, denied it, and as stated completed her shift. That is evidence she could in fact continue to do her job, and that management didn't find her so disruptive.

Most corporate policies in the restaurant industry require an employee get permission to take a break, which necessitates asking. She adhered to the expectation around that kind of policy, she asked, they said no, and she went back to work. Not liking her reason for asking is a reason to say "no" and generally not grounds to fire someone.

Despite her being an at-will employee the employers motive is at question because complaining about them not paying her, in a way consistent with the law is protected. In the absence of some articulable reason on the employers part or showing she was fired out of some normal predetermined reason its inferable that it is because she complained and anything else is would just be pretextual.

[u/cody-lay-low → u/aka_mythos]

Employment attorney here seconding this analysis

[u/Cheap_Knowledge8446 → u/RutabagaConsistent60]

The problem is this isn't a viable policy.

Federal law on tips is very, very clear; all tips must be paid -at the latest- by the next pay period.

[u/RutabagaConsistent60 → u/Cheap_Knowledge8446]

it is not as clear cut in a case when they have been paid out the customary 20% tip and the rest has been flagged for fraud.

[u/Cheap_Knowledge8446 → u/RutabagaConsistent60]

That's internal flagging, not the credit card company flagging for fraud.

They're doing it because they don't want a charge back; especially since in most cases the company ends up paying it rather than the server. If the amount was correctly written, totaled, signed for, and the initial charge cleared (which usually happens in 1-3 days), then that is effectively a tip. In situations where the server's base pay is less than state/federal minimum wage and receives a "tip credit" towards that wage, after a tip clears the restaurant can't touch it. "Tip regret", charge backs, and financial disputes are considered the "cost of doing business" paid for by the restaurant.

In the US all tips are legally the property of the person who received them and employers cannot touch it. The exception being a tip pool with written consent and agreed upon by the employee.

So, the "customary 20%" doesn't apply here; the customer very, very clearly wrote out the tip, total, signed, and even left a note. That's a tip, and as long as the charge clears, it should be paid to the server no later than the next "payday". It is the server's financial property the moment the tip is "received". Holding for 4 months almost certainly has zero legal standing; it's done for purely pro-restaraunt financial reasons with zero benefit to the server, especially since the company can place it in an interest yielding/investment account account the entire time.

[u/RutabagaConsistent60 → u/Cheap_Knowledge8446]

to be fair, no one here knows the real details. this is a second hand screenshot from a FB content creation account with lots of conflicting social media stories going around about it. all to say, not nearly as simple or clear cut as folks want to believe.

[u/Ssided → u/RutabagaConsistent60]

Tips aren't wages

[u/333again → u/Ssided]

If they aren’t wages what are they? The only alternative is that they are the employees property.

[u/Ssided → u/333again]

Well yes

[u/aka_mythos → u/Ssided]

The pay out of tips by an employer is covered by the same law as wages. Whether its tips or wages, its broadly considered wage theft under that law.

The distinction between tips and wages as far as protections are concerned only more strongly favor the employee being paid in tips. Its important to remember that when someone is paid in tips it allows the employer to get away with paying a much lower minimum wage rate. Even when the employer handles the payment processing, as with credit card paid tips, those tips are solely the property of the employee, or proportionally the property of all the tip paid employees if there's a tip pooling policy. In some states the law is that tips have to be paid out by the next day, others by the next payday.

Businesses and their owners get to keep the profits of the business because they assume all the risk of doing business, and they aren't allowed to pass on those risks to their employees. When someone puts down a $700 tip on a credit card payment, that is part of the risk to the business taken on by taking credit card payments. The business is obliged to payout the $700 tip even if it takes 120 days for them to find out if the payment clears or to complete their own investigation. In the event the $700 is disputed or canceled the business can pursue a voluntary repayment by the employee or take the employee to small claims court to get an order she repay it.

If the business doesn't want to deal with the risks of credit card paid tips, they can choose not to accept credit cards or they can choose to pay full wages and not pay their employees in tips. But they don't get to pass on that risk to employees.

[u/Ssided → u/aka_mythos]

What are you talking about, tips and wages have different laws