The Washington Post quoted MSE partner Molly Elkin in an article discussing the decision of famed DC restaurant, Rasika, to start paying its servers as commission-based employees as opposed to paying them a typical hourly wage. The article is available here: In Rasika’s union fight, servers object to commission-based pay – The Washington Post. Although legal to pay restaurant servers on commission, this policy impacts workers’ pay rights, may be difficult to comply with, could result in employees being paid more than they otherwise would as an hourly employee.
The Fair Labor Standards Act includes important rights for restaurant workers. The law requires that, in order to avoid paying commission-based employees traditional overtime compensation, the pay of commission based employees must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which the employee also works more than 40 hours; in DC, one and one-half times the minimum wage is $26.26. As Elkin states, the restaurant owner “sort of backed into a guarantee by claiming these as commission workers…If they don’t have a table and they’re there for seven hours, he’s still got to pay them $26.26 an hour in order to call them commission workers.” Significantly, if Rasika fails to meet this threshold, Rasika would be required to pay servers overtime compensation for all hours worked over 40 in a workweek.
Wage and hour violations are rampant in the restaurant industry. Among other things, restaurants often fail to properly pay employees (particularly tipped employees) minimum wages, require employees to participate in unlawful tip pools, or fail to pay overtime compensation. If you are a restaurant worker and believe you have not been paid the wages you are owed under the law, please contact MSE today through our website or by emailing [email protected] to schedule a consultation with an experienced labor and employment attorney.
