Legal Question in Employment Law in Louisiana
Can a company pay outside contractors from gratuity pool?
We have a gratuity pool at work. We are using contract labor since we are understaffed. The company pays 15$ per/hr for this labor and has been paying it directly out of the gratuity pool for the servers. The pool works as follows. The company charges 19.8% gratuity on checks. 14% goes to the pool and the rest goes to the house. Of this 14%, 86% goes to servers and 14% goes to housemen. The contracted labor is paid directly out of the 86% that goes to the servers. Is this legal? For all intents and purposes the servers are basically paying the contract labor, since the company does not want to use lateral service from within the hotel because they do not want to pay the overtime this usually creates. Shouldn�t the company have to pay the contracted labor out of their out of their pocket not out of our gratuity pool. Just some more info: we are paid $3.85 an hour. The 86% pool is divided by the total # of hours the servers work and a dollar amount is calculated. Each server is paid this dollar amount for that week on top of the hourly salary.
2 Answers from Attorneys
Re: Can a company pay outside contractors from gratuity pool?
Dear LawGuru Friend,
First of all, although I have read your post, I do not understand fully what is going on. However, it does look to me as if the employees (you) are paying the wages for these contract employees. That does not see right. All I know for you to do is to contact the U.S. Department of Labor, Wage and Hour Division, and explain this situation to them and get their advice. Then someone will have to file a formal complaint with U.S. Department of Labor to get justice in this situation. Employment law is a complicated field, and especially Federal Employment law and laws. Nevertheless, if you think you are losing money by the way the present system for paying contract labor is being conducted, then contest what the employer is doing; and I think the U.S.D.O.L. Wage and Hour Divison is your best hope for initiating your pursuit for justice in the workplace. Best of luck!
Sincerely,
Hardy Parkerson, Atty.
Lake Charles, LA
P.S.: Go to Counsel.Net with your search-engine and post your question under the Employment Law section. There are some guys there that seem to know lots about Employment law, especially one who calls himself Terry. He is a little negative, in my opinion, about always telling people "it can't be done;" but, still, he might be able to give you some good advice. As I say, Employment law is one of the more complicated fields of law. Good luck! Hardy
Re: Can a company pay outside contractors from gratuity pool?
The problem you are describing is complicated because you are a tipped employee pursuant to the Fair Labor Standards Act ("FLSA"). My gut reaction is that this practice is not legal, but I would need to know more information to be sure. As a previous person suggested, you could call the DOL and speak with them about this situation, but they too are probably going to need more information. If any of the employees in the pool ever left their employment (quit or were fired) during this arrangement, they might also have a claim under the La. Wage Payment Statute. Good luck and hope this helps.
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