Making employees pay for uniforms can be illegal
Last month, the U.S. Department of Labor (DOL) filed suit against a restaurant and its owner for back wages and liquidated damages for 26 employees.
An investigation by the DOL’s Wage and Hour Division (WHD) found multiple violations of the federal Fair Labor Standards Act (FLSA), including making illegal deductions from servers’ pay for uniforms, aprons, name tags, and lost items such as crackers and utensils, resulting in employees not earning minimum wage.
The WHD alleged that the company owes $75,402 in back wages to the 26 workers.
Limits on employee wage deductions
While restaurant profit margins might be thin and overhead expenses high, that doesn’t mean the business may dock employees’ pay for these kinds of costs. Many companies in the service industry have business-related expenses like the ones listed above, as well as:
- Cash drawer shortages,
- Tools required for work,
- Broken equipment,
- Lost supplies, and
- Customers who don’t pay their bills.
The FLSA does not, however, allow employers to make deductions from employee pay for any items which:
- Are considered primarily for the employer’s benefit or convenience, and
- Would reduce employee earnings below the minimum wage.
Case in point
If, for example, Bob’s Business requires Jo Employee to wear a uniform because it’s required by:
- Law,
- The nature of the business, or
- The employer,
The cost is considered Bob’s Business’ expense and not Jo’s.
If Bob wants Jo to wear specific clothing not worn outside of work, Bob will likely need to cover the cost. If Bob wants Jo to wear a general uniform like regular khakis and a polo shirt that can also be worn outside of work, Bob may require Jo to pay for it without considering the cost as coming out of Jo’s wages.
Otherwise, Bob may not require Jo or any employee to pay for uniforms that would bring their pay below the federal minimum wage.
How much do employees pay?
If an employer requires employees to bear the cost of work-related expenses, it may not reduce the employee’s wage below the federal minimum wage of $7.25 per hour. Nor may that cost cut into overtime compensation required by the FLSA.
If, for example, Jo was paid $7.75 per hour and worked 30 hours in the workweek, the maximum amount the employer could legally deduct from Jo’s wages would be $15 ($.50 X 30 hours).
Employers may spread out deductions for uniform or other costs over a period of paydays, as long as they’re compliant with the FLSA.
Key to remember: Improper wage deductions are on the WHD’s radar, especially in certain segments. The restaurant industry employs people who, in addition to being among the nation’s lowest paid workers, can also be vulnerable to wage theft because they might not know their rights and protections or be reluctant to exercise them. Therefore, the WHD takes these cases seriously.