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Wisconsin Court Rules that Restaurants Owe Back Wages to Servers

A Federal judge in Wisconsin has ruled in favor of servers at a restaurant in Wisconsin claiming minimum wage violations. Wisconsin’s minimum wage is $7.25 per hour. A Wisconsin regulation permits restaurants to take a “tip credit” and pay only $2.33 per hour because the waiters and waitresses receive tips from their customers. However, that regulation requires restaurants to obtain a “tip declaration signed by the tipped employee each pay period … to show that when adding the tips received to the wages paid by the employer, no less than the minimum rate was received by the employee.” The restaurant had never obtained these declarations and so was not entitled to take the tip credit. It should have paid its servers $7.25 per hour. The servers were awarded the difference – $4.92 – for every hour they worked in back pay.

This case is the first of its kind in Wisconsin. Several courts have ruled for employees under a similar law in Connecticut. This case provides opportunities for servers to sue for back minimum wage violations. A server who worked 30 hours per week for two years can win over $15,000. Laws like this are frequently used to bring class actions to recover back wages for all the servers at a restaurant.

Servers should act quickly if they believe they have a claim. The statute of limitations is two years.