A new lawsuit against a Georgia craft brewery is making the rounds, and it's the same old recipe—alleged FLSA violations in how tipped employees are paid. Don't brew the same legal trouble for yourself.
Here's what every taproom, brewpub, and brewery owner needs to know to stay out of court in wage and hour lawsuits:
1. Don't pay tipped minimum wage for everything.
That $2.13/hour federal tipped minimum wage (don't forget to check your state law, which could provide for a higher minimum wage) only flies for time actually spent doing tip-generating work (serving, bartending, etc.). If you're asking staff to scrub kegs, stock coolers, or mop the floor before the doors open or after close, those hours need to be paid at the full minimum wage. The "side work" exception is real, but it has limits—no more than 20% of the shift, and it has to be related to tipped duties.
2. Your tip pool isn't a slush fund.
You can't ever include owners, managers, supervisors in the tip pool, and also can't include non-tipped workers (e.g., kitchen staff) when you pay take a tip credit against the minimum wage of your tipped workers. Allowing them to dip their hand in the tip pot violates the law and can invalidate your entire tip credit. (Translation: You might owe three years of back pay.)
3. Keep your records as clean as your glassware.
You have to inform employees about your tip pool, how it works, and keep clear records of who gets what. Surprises are fun in a beer flight, not in a paystub.
4. Lack of good faith = double trouble.
If you're found to have not acted in good faith in violating wage and hour laws, you could owe double damages. Plus, your employees are also entitled to recoup their attorneys' fees if they prevail in their lawsuit. These damages significantly increase the stakes.
Here's my takeaway: Don't try to squeeze every dollar from your payroll at the expense of your staff (and your reputation). Do right by your people, follow the law, and spend your time crafting beer—not fighting wage claims. Because nothing skunks a fresh pour faster than an FLSA violation—mess up your tip practices and you're not just risking lawsuits, you're brewing a batch of bitter morale, flat teamwork, and a reputation that'll leave everyone with a bad aftertaste.
Got questions about tip credits, side work, or want to make sure your pay practices are otherwise clean? Let's connect. A 15-minute chat now can save you from a legal hangover later.
Cheers to keeping your beer—and your business—clean!
1. Don't pay tipped minimum wage for everything.
That $2.13/hour federal tipped minimum wage (don't forget to check your state law, which could provide for a higher minimum wage) only flies for time actually spent doing tip-generating work (serving, bartending, etc.). If you're asking staff to scrub kegs, stock coolers, or mop the floor before the doors open or after close, those hours need to be paid at the full minimum wage. The "side work" exception is real, but it has limits—no more than 20% of the shift, and it has to be related to tipped duties.
2. Your tip pool isn't a slush fund.
You can't ever include owners, managers, supervisors in the tip pool, and also can't include non-tipped workers (e.g., kitchen staff) when you pay take a tip credit against the minimum wage of your tipped workers. Allowing them to dip their hand in the tip pot violates the law and can invalidate your entire tip credit. (Translation: You might owe three years of back pay.)
3. Keep your records as clean as your glassware.
You have to inform employees about your tip pool, how it works, and keep clear records of who gets what. Surprises are fun in a beer flight, not in a paystub.
4. Lack of good faith = double trouble.
If you're found to have not acted in good faith in violating wage and hour laws, you could owe double damages. Plus, your employees are also entitled to recoup their attorneys' fees if they prevail in their lawsuit. These damages significantly increase the stakes.
Here's my takeaway: Don't try to squeeze every dollar from your payroll at the expense of your staff (and your reputation). Do right by your people, follow the law, and spend your time crafting beer—not fighting wage claims. Because nothing skunks a fresh pour faster than an FLSA violation—mess up your tip practices and you're not just risking lawsuits, you're brewing a batch of bitter morale, flat teamwork, and a reputation that'll leave everyone with a bad aftertaste.
Got questions about tip credits, side work, or want to make sure your pay practices are otherwise clean? Let's connect. A 15-minute chat now can save you from a legal hangover later.
Cheers to keeping your beer—and your business—clean!