LEGAL GUIDE
Written by Avvo Staff | Jan 14, 2017

Can servers be forced to pay for customers that walk-out?

Never from tip money

According to the Federal Department of Labor, “employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.” So, an employer cannot take the cost from the server’s tips.

In some cases, an employer may deduct the cost from the employee’s paycheck, but it depends on the state laws. Check this table on wage deductions to see the laws in your state.

In California, for example, the labor code explicitly states that walk-outs are part of the “cost of doing business” and that an employer may not deduct wages for them. But other states aren’t as friendly towards the worker. In Virginia, for example, it is legal for an employer to deduct wages if the employee has agreed to it in writing. Usually, this is part of their employee contract.

Paycheck deductions are never legal if they cause the employee’s gross pay (tips + paycheck) to fall below minimum wage. To be sure, check your state’s department of labor website. You could also post a question in the Avvo Q&A forum to get answers from a lawyer in your state.

Bottom line: it’s bad business

On a practical note, making servers cover the cost of walk-outs is a questionable policy. The practice villainizes employees and makes it hard for them to do their jobs. If walk-out situations are frequent, a restaurateur may want to purchase an insurance policy that covers theft.

For servers in this situation, consider having an open conversation with management. If their policy is, in fact, illegal in your state, then you can make a wage claim via the Department of Labor Wage and Hour Division.

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