The Outrageous Restaurant Industry Practice That’s Surprisingly Common—and Not Always Illegal

What to eat. What not to eat.
Dec. 6 2013 7:59 PM

Victimized Twice

Restaurant workers’ wages are routinely docked when customers walk out on their tab. It’s an outrage, and it needs to stop.

Young waitress
How is it a server's fault if customers walk out on their checks?

Photo by Dana Neely/Photodisc/Thinkstock

Last month, a New York City waitress who’d just been fired after she refused to cover the $96 tab of a party who walked out without paying posted an angry message on Reddit. Her story earned sympathy from other Redditors and soon went viral, with a hand from Gawker. Many commenters on Gawker and Reddit were outraged by the unfairness of the restaurant’s policy—it doesn’t seem right that a server should be held responsible for a customer’s dishonesty. The truth is this practice is far more common than most people outside of the restaurant industry might realize. Many servers are forced to perform two jobs at once: delivering food and working as a severely undertrained and underpaid security force.

The dine-and-dash is often looked on as a harmless prank, without any serious consequences. Restaurants anticipate the occasional walkout as part of their business plan, right? They should, but instead they often pass the buck to employees—and when you learn that servers can be required to pay for the losses out of their own pockets, it doesn't seem all that funny. The problem is that there aren't strong protections against the practice in federal labor laws, and state laws prohibiting wage deductions for loss and theft are too often ignored by employers and unknown by workers. It’s time we prohibit this practice and empower employees to stand up against it when restaurant owners try to dock their pay.

The waitress whose story caught fire online, Suzanne Parratt, had been aware of her restaurant’s policy of charging servers for walkouts for years. “It was repeatedly drilled into our minds that if a customer were to ever dash on a check, that the server is responsible for the tab,” she told Gothamist. “This is not uncommon in the restaurant industry, but in my many years of experience I've never actually seen it practiced.”

Advertisement

While there are no official numbers on how often servers are pressured into paying for walkouts, Parratt is right that the situation is common. As someone who’s worked in and reported on the restaurant industry for many years, I've seen it myself, and even had it happen to me. I’ve talked to a few dozen friends, colleagues, and industry labor activists over the last two weeks, and they nearly unanimously agreed that the practice is widespread. Servers from everywhere along the industry food chain, from hole-in-the-wall diners to national chains to independent, higher-end restaurants, had all either seen it happen or been victim of it themselves. Most asked to remain anonymous to avoid getting into trouble at work, or spoiling references for future employment.

A waitress at one diner in Boston told me, “We had to pay for every mistake: people skipping out, or adding mistakes. We got paid every few months with a list of deductions.” A second who worked in Rhode Island said her bosses made servers pay not only for walkouts but also for broken glasses or plates. At some restaurants, having to pay for walkouts or other mistakes was the official internal policy. Elsewhere it was handled on a case-by-case basis, but would often depend on the whim or the mood of managers.

Chris Barriere, a 10-year industry veteran who tends bar in Houston, says this practice is one of the reasons he won't work as a waiter anymore.* “They make you pay [for walkouts] out of your tips,” he explained. “If they really like you, and it almost never happens, then they might discount the food 50 percent, but that's it. I think everywhere I've worked makes you do it. They feel that if they walked you weren't attentive enough.”

A former employee of a Boston bar says it’s unfair to expect servers to be attentive enough to prevent walkouts. “Imagine trying to make sure drunk college kids don't walk out of the beer garden while you're literally supposed to run up two floors for food, and one for mixed drinks. Not an easy task,” she said.

“We had a feeling it was illegal,” said another longtime server in Cambridge, who listed a handful of well-known fine dining restaurants and neighborhood taverns where it was a regular practice. She and her colleagues tended not to complain for fear of retaliation. “They know that you won't seek legal action over $60 and lose your job,” she said.

On a federal level, this type of wage deduction isn’t roundly prohibited by the Fair Labor Standards Act, the law that establishes minimum-wage and other employment standards. The FLSA generally prevents employers from taking servers' tips, and it prohibits wage deductions for walkouts when an employer claims the maximum tip credit or when such deductions bring a worker’s net earnings below minimum wage. The Department of Labor's Wage and Hour Division explains, “Where deductions for walk-outs, breakage, or cash register shortages reduce the employee’s wages below the minimum wage, such deductions are illegal.” This is small consolation, however, to the server who's held responsible for, say, a $50 walkout check but whose tips otherwise bump his earnings over the federal minimum wage of $7.25 per hour. It’s even smaller consolation to servers at some restaurants that (illegally) monitor employees to make sure they claim tip earnings sufficient to push them over the minimum wage threshold—whether or not they’ve actually earned that amount.

Unsurprisingly, the knowledge that they’ll be held responsible for walkouts makes servers hypervigilant about dine-and-dashes. In rare, extreme cases, this can lead waiters into dangerous situations. A few years ago a waitress in Columbus, Ohio, was paralyzed when she was struck by the car of an absconding customer who she chased into the parking lot. A few years before that, a waitress in Irving, Texas was killed in a similar scenario. Tragedies like these might be less likely to happen if servers didn’t fear losing significant portions of their earnings on walkouts.

Some states have taken action to protect restaurant employees from being held responsible for walkouts. Massachusetts law, for instance, “prohibits wage deductions associated with an employer's unilateral determination of an employee's fault and damages.” Similarly, in New York, wages cannot be subject to deduction for “spoilage or breakage” or “cash shortages or losses.” The same is true in California, where “No employer shall make any deduction from the wage or require any reimbursement from an employee for any cash shortage, breakage, or loss of equipment, unless it can be shown that the shortage, breakage, or loss is caused by a dishonest or willful act, or by the gross negligence of the employee.”

The parts about dishonesty and “gross negligence” complicate the issue somewhat. Restaurant owners and managers will often argue that they have to protect themselves from deliberate internal theft and scams, such as when servers might look the other way for family and friends. And why shouldn't an employee be held responsible for mistakes, asked a restaurant manager I spoke to. “The server getting walked out on is probably the same bonehead that's misfiring orders on the regular,” he said, adding that it’s “understandable for a manager to occasionally hold an irresponsible server accountable for mistakes that affect the establishment's bottom line.” (He didn’t want to be identified, because he didn’t know whether the practice was legal in every state he’s done it.)

However, there are already protections for employers against a habitual thief or screw-up; incompetence and theft are both considered sufficient cause for dismissal. And punishing bad eggs is different from deducting from wages because a server has made an honest mistake or been taken advantage of, which is what happens with your standard restaurant walkout. No reasonable person, or law, could argue that it’s an employee's fault when a store is robbed, which is essentially what happens when a customer walks out on a check.

And yet in many states, restaurants may legally dock wages from servers who’ve already been victimized by dine-and-dashers. (Remember, when patrons walk out on their tab, a server misses out on crucial tip income.) Even in states where the practice is technically illegal, the threat of being retaliated against—as Parratt allegedly was—is so great that servers don’t stand up to bullying tactics from managers who see workers as disposable, precisely because they're not required to pay them an actual wage, says Vincent Mersich, a labor lawyer in Pennsylvania. “Restaurants can transfer so much of their operating risk onto employees by paying them significantly less than minimum wage,” Mersich told me. Employers in these scenarios are essentially saying, “ ‘You haven't assumed enough of that risk; you also have to assume the risk of people walking out on their checks,’ ” Mersich added. “At that point it seems exceedingly exploitative.”

The restaurant industry is messed up in many significant ways, as the recent fast-food workers strike has reminded us, but problems like wage theft, sexual and racial discrimination, and reliance on undocumented workers are at least explicitly illegal. Docking wages for walkouts should be illegal across the board, too, either via an amendment to the Fair Labor Standards Act or via more progressive laws at the state level. In the meantime, servers in states where it’s already outlawed, like California, need to educate their colleagues and customers about this deceptive and unfair practice. Perhaps, in order to raise awareness, a walkout is in order?

*Correction, Dec. 9, 2013: This article originally misspelled Chris Barriere's name. (Return to the corrected sentence.)

Luke O'Neil is a journalist in Boston. He blogs at PTSOTL.