Servers at Ruby Tuesday are being cheated out of their wages, according to a new class action lawsuit filed in the US District Court for the Eastern District of Tennessee on March 30, 2016. In her complaint, Charlene Craig, a server at a Ruby Tuesday in Chattanooga, says her employer routinely violates the federal Fair Labor Standards Act, forcing both servers and bartenders to complete excessive “side work,” but failing to pay them at the required federal minimum wage.
Ruby Tuesday Server Files Wage & Hour Lawsuit
While the Tennessee court has yet to certify the class, Craig hopes that her lawsuit, which also claims the company encourages uncompensated “off-the-clock” work, will come to include thousands of Ruby Tuesday workers nationwide. In her complaint, which you can read here, Craig describes the putative class as including:
“All current and former servers and bartenders who worked at a Ruby Tuesday-owned domestic Ruby Tuesday restaurant at any time during the applicable limitations period covered by this Complaint (i.e., two years for FLSA violations, and three years for willful FLSA violations) up to and including the date of final judgement in this matter.”
Ruby Tuesday currently owns and operates 658 restaurants, with franchisees owning another 78 domestic and international locations.
Instead of compensating for side work at the federal minimum wage, $7.25 per hour, Ruby Tuesday pays servers at $2.13, the minimum cash wage allowed for tipped employees under federal law, Craig alleges. But that shockingly low pay, she says, continues even after an employee has spent more than 20% of their time completing un-tipped tasks, which is now considered the legal cut-off point for “tip credit” pay.
Craig’s lawsuit follows in the footsteps of a precedent-setting 2012 case, in which more than 5,500 Applebee’s workers accused their employer of underpayment. The servers, many of whom worked in Missouri, where “tip credits” are legal, said Applebee’s routinely forced them to perform side work more than 20% of the time, but continued to pay at the tipped minimum wage of $2.13 per hour. Federal courts in Missouri sided with workers, and the Supreme Court declined to hear Applebee’s appeal. The company ultimately settled with around 5,680 employees for $9.1 million, according to the Chattanooga Times Free Press.
What Is “Side Work”?
“Side work” includes any tasks that fall outside a server’s normal duties, like making coffee or, as in Craig’s lawsuit, cutting lemons and rolling silverware. By any reasonable standard, a server’s job is to serve actual customers, taking orders, delivering food and cleaning a table after the meal – all tasks for which a “tip” can be considered direct compensation. But side work doesn’t directly touch the experience of a customer, and it doesn’t “produce tips,” as a New York District Court recently held in a different class action.
In her lawsuit, Craig provides a long list of tasks she believes fall under the heading of “side work,” including:
- Brewing coffee and tea
- Polishing silverware and glasses
- Rolling silverware
- Sweeping floors
- Cleaning the server alley
- Packing up orders to-go
- Warming ovens and baking bread
- Restocking condiments and the salad bar
In the end, you have two different types of work, at least where pay is concerned. On the one hand, servers assist customers directly, and when they do so, they receive tips. Federal law allows for this additional stream of compensation by letting employers take a “tip credit,” essentially lowering the minimum hourly wage they’re required to pay servers. But that “tip credit” can’t roll over to side work, since side work doesn’t result in tips. If servers were compensated only at their tipped hourly wage for side work, they’d be making a paltry $2.13 per hour – and that’s it.
Some Side Work Is Okay
For compensation purposes, a little side work is okay. Under federal law, tipped employees can spend up to 20% of their time performing side work before the federal minimum wage of $7.25 per hour kicks in.
Here’s an example to make this clear:
Tyler works an eight hour shift at Ruby Tuesday Monday through Friday. On Fridays, the restaurant is busy and almost all of Tyler’s time is spent serving customers. On a particular Friday, however, Tyler spends about an hour polishing glasses, restocking the salad bar and rolling silverware. Since Tyler only spent one hour of that eight hour shift doing side work, and one is only 12.5% of eight, it’s perfectly legal for his employer to pay him a tipped wage of $2.13 for all eight hours.
But the next Wednesday, the restaurant is slow, so Tyler spends a lot more time, around three hours, sweeping the floors and helping out in the kitchen. He only spends five hours serving customers, and thus earning tips. His employer is allowed to pay him the tipped wage of $2.13 for those five hours, but since more than 20% of his time, 37.5% to be exact, was spent performing side work, the restaurant has to pay him at the federal minimum wage of $7.25 per hour for the other three hours.
Some States Don’t Allow “Tip Credits” At All
While Craig has said that she hopes thousands of Ruby Tuesday employees will ultimately join her in taking legal action, and Ruby Tuesday currently has locations in 44 states, note that employers in some states aren’t allowed to take “tip credits” at all:
|State||2018 Minimum Wage|
In any of those seven states, businesses have to pay their workers at least the state minimum wage, prior to tips, and there are no exceptions for “side work.” In 27 other states, legislators have enacted state minimum wages higher than the federal minimum wage, and changed the size of tip credit employers can legally take to match. We’ve listed these states below, alongside the minimum cash wage allowed by law for tipped employees:
|State||Minimum Cash Wage For Servers|
Craig’s lawsuit has been registered as case number 1:16-cv-00074-TAV-SKL in the US District Court for the Eastern District of Tennessee.
In a prepared statement, Ruby Tuesday told Nation’s Restaurant News, “While we cannot comment on pending litigation, we are committed to our Ruby Tuesday team members, and we will be providing a vigorous defense of the company on this matter in the appropriate forum.” We sincerely hope that “vigorous defense” includes ample evidence Ruby Tuesday has been paying Charlene Craig, and thousands of other employees, appropriately.
Click here for information about payroll services for a small business.