Waffle House shafts its servers out of a portion of their pay by requiring that they also wash dishes and cook, labor advocates say.
The restaurant chain engages in “rampant wage theft like performing non-tipped work for tipped wages,” according to the Union of Southern Service Workers, or USSW, which filed a complaint with the Department of Labor on Thursday.
In it, the union accuses the Georgia-based corporation of violating the Fair Labor Standards Act’s tip credit requirements and failure to pay servers the federal minimum wage, which has been stalled at $7.25 since 2009.
Employers can satisfy a part of the minimum wage obligation to tipped workers by taking a partial credit, paying an hourly rate of as little as $2.13 so long as its for tipped employees who receive enough in gratuities to earn the minimum, according to the Labor Department.
Waffle House CEO Joe Rogers III in June announced the company was hiking base pay for its roughly 40,000 servers to $3 an hour from $2.92.
“It’s a bunch of hooey,” Cindy Smith, 50, a Georgia resident who has worked for Waffle House nearly 30 years. “They say we are all family, but when your family needs something, they don’t care.”
Many of Waffle House’s roughy 40,000 workers live in motels, paying week to week, added Smith, who said she frequently goes hungry to pay for her car and auto insurance.
Smith, a server at a Waffle House in Conyers, Georgia, spends about two hours of each eight-hour shift cleaning and doing side work, and typically takes home between $80 and $120 in tips per day, in addition to her $3 an hour base. “They should compensate us for doing that labor,” she said.
Accusations of unpaid wages
The complaint cites the Georgia-based corporation’s use of the so-called tip credit to pay servers a tipped wage even when they are performing unrelated, non-tipped tasks such as dishwashing or cooking, according to USSW, part of the Service Employees International Union.
According to the document, Waffle House does not employ dishwashers, kitchen helpers or janitors, but relies on servers to clean the restaurant and wash dishes. Janitorial and dishwashing work are not infrequent tasks, but a core part of servers’ duties.
Waffle House servers spend one to three hours per shift engaged in work outside of their tipped occupation of serving customers, “resulting in between $15.6 to $46.8 million of unpaid wages annually,” USSW estimates.
Waffle House did not respond to a request for comment from CBS MoneyWatch. The 68-year-old, privately held chain is open 24 hours and operates 1,708 corporate-owned restaurants in 25 states.
Tipped workers are especially vulnerable to exploitation in the form of wage theft, according to the Economic Policy Institute. A recent analysis by the left-leaning think tank found that U.S. workers who earn tipped wages are 2.3 times more likely to live in poverty than non-tipped workers.
A DOL investigation of nearly 9,000 restaurants from 2010 to 2012 found 1,170 tip credit violations worth nearly $5.5 million, according to EPI.
