Yes, covered restaurant workers can sue in federal or state court for unpaid minimum wage, overtime, and stolen tips. The Fair Labor Standards Act, the federal wage law, lets workers recover back pay plus an equal amount as liquidated damages.
Cornell Law School Legal Information Institute describes this private right to sue in the current text of 29 U.S.C. § 216. That remedy also includes attorney's fees and court costs.
Table of Contents
- What can you sue for?
- How does the $2.13 tip credit work?
- Who can share your tips?
- How long do you have to act?
- What if you fear punishment or cannot afford court?
What can you sue for?
Covered workers can sue for minimum-wage shortfalls and unpaid overtime. Cornell Law School Legal Information Institute states the same law also covers tips kept by owners, managers, or supervisors.
Liability can include the tip credit taken plus all tips kept unlawfully. It can add an equal amount as liquidated damages and a civil penalty up to $1,100 per violation. Common warning signs include:.
- paychecks below the required minimum after tips
- overtime hours paid at straight time
- managers taking a cut of the tip jar or tip pool
How does the $2.13 tip credit work?
Federal rules allow a direct wage of at least $2.13 per hour for tipped staff. The U.S. Department of Labor Wage and Hour Division explains in its fact sheet on tipped employees that tips must bring total pay to at least $7.25 per hour.
The employer must pay the shortfall when tips fall short. A tipped employee generally earns over $30 per month in tips. For example, a server earning $2.13 plus $4.00 in tips averages $6.13 per hour. The restaurant must add at least $1.12 for each hour.
Who can share your tips?
When an employer claims a tip credit, a mandatory tip pool must stay limited. Womble Bond Dickinson reports the pool is limited to employees who customarily and regularly receive tips. The firm notes DOL's Sept. 30, 2025 Opinion Letter FLSA2025-03 found front-of-house oyster shuckers may qualify.
That decision turned on visible, customer-facing service work. Managers still face a clear limit. Amundsen Davis LLC reports DOL clarified on Jan. 14, 2025 that managers meeting the executive-duties test cannot share in mandatory tip pools. The 2021 80/20 rule for side work was vacated in August 2024, with DOL returning to the dual-jobs rule in December 2024.
How long do you have to act?
FLSA wage suits have a two-year deadline from the violation. FindLaw notes the deadline extends to three years for willful violations. Late tip or overtime claims can therefore become time-barred.
Workers should compare pay stubs, schedules, and tip records promptly. A short delay can cost several pay periods of recovery. Keep dates, hours, tip-pool rules, and names of people who took tips.
What if you fear punishment or cannot afford court?
Retaliation for raising pay complaints is illegal. Wiley Wheeler P.C. explains firing, demotion, hour cuts, or other punishment for filing or supporting an FLSA complaint is barred.
That protection covers oral and internal complaints. Affected workers can sue for retaliation or seek reinstatement and lost wages. A free complaint to DOL's Wage and Hour Division is another path. Insurance Journal described DOL's recovery in its report on the Austin restaurant recovery, $77,523 for 12 Austin restaurant workers denied overtime.