A group of wait staff employees recently filed a lawsuit against Texas Roadhouse, Inc., alleging that it had violated Massachusetts Tips Law and Massachusetts Minimum Wage Law. Ultimately, Texas Roadhouse agreed to settle the putative class action suit for $5 million.
Under Massachusetts Tips Law, only wait staff employees, service employees, or service bartenders are permitted to participate in a tip pool when the tips are used to fulfill minimum wage requirements. Massachusetts law allows an employer to use tips to, in part, fulfill minimum wage requirements for employees who receive at least $20 per month in tips. An employer may pay its employees $2.63 plus tips when the total amount paid is equal to or greater than the state’s $8.00 minimum wage requirement.
In the lawsuit, Crenshaw, et. al, v. Texas Roadhouse, Inc., the plaintiffs alleged that Texas Roadhouse improperly distributed pooled tips to employees who were not wait staff employees, service employees, or service bartenders. As a result of Texas Roadhouse’s alleged improper distribution of pooled tips, the plaintiffs claimed that they were paid less than minimum wage. The plaintiffs argued that because employees other than those who regularly and customarily received tips participated in the tip pool, Texas Roadhouse improperly claimed the tips toward the minimum wage.