Overtime Pay in the Service Industry: Tips for Restaurant Workers

Overtime Pay in the Service Industry: Tips for Restaurant Workers

Under the Fair Labor Standards Act (FLSA), overtime consists of any hours worked over 40 in a workweek. For every overtime hour, you should be receiving one and one-half times your regular rate of pay. 

Most hourly employees in the service industry, including those who receive tips, are eligible for overtime pay. There are exemptions, but most restaurant workers do not fall under these. 

As a restaurant worker in the bustling New York metropolitan area, understanding your rights to fair compensation is crucial, irrespective of your nationality or immigration status. We’re here to provide you with essential information about overtime pay and tips that will help ensure you are being paid legally and fairly for your hard work. 

Calculating Overtime Pay 

Regular Hourly Rate of Pay 

Your “regular hourly rate of pay” includes your hourly wage (if paid by the hour) or your gross weekly wages (if paid other than by the hour) divided by the total number of hours worked within the week (up to forty in the hospitality industry) . To determine your overtime rate, your regular hourly rate is multiplied by 1.5. 

Overtime Calculation 

For calculation purposes: 

  1. Calculate your gross wages for the week. 
  1. Divide this total by the number of hours worked (if in the hospitality industry multiply by 40) to get your regular rate. 
  1. Multiply your regular rate by 1.5 to find your overtime rate per hour. 
  1. Multiply your overtime rate by the number of overtime hours worked. 

Common Overtime Issues 

Misclassification of Employees 

Some employers might incorrectly (or purposefully) classify workers as ‘exempt’ from overtime to avoid paying extra. If you are a non-managerial employee, you are likely non-exempt and should receive overtime pay. 

Working Off the Clock 

All hours worked need to be paid and working “off the clock” before or after your shift, without compensation, is illegal. 

Tip Credits and Overtime 

Under certain conditions, employers may take a “tip credit,” paying employees less than the statutory minimum wage because tips are part of their earnings. However, overtime pay must be calculated based on the full minimum wage, not the lower wage paid after taking the tip credit. 

Protecting Your Overtime Rights 

Keep Accurate Records 

Maintaining detailed records of the hours you work, including overtime hours, is essential in case of disputes. 

  • Date and time of shift 
  • Breaks taken 
  • Tips received (daily) 
  • Total hours worked (weekly) 

Know Your Rights 

Familiarize yourself with the FLSA and your state’s labor laws. New York, for instance, has specific labor laws that might provide greater protections than the FLSA. 

Report Violations 

If you suspect your employer is violating federal or state labor laws, you should consult with an employment law firm that concentrates on wage and hour violations . 

Identifying Red Flags: When to Seek Legal Help 

If you’re a restaurant worker clocking in extra hours, being mindful of the signs that you are being taken advantage of regarding overtime pay is crucial. These are red flags that could indicate it’s time to seek legal help: 

  • No Compensation for Overtime: If you are not receiving additional pay for hours worked beyond the standard 40-hour workweek, this is a direct violation of the FLSA and NY Labor Law. 
  • Incorrect Pay Rate for Overtime: Overtime should be paid at one and one-half times your regular rate. If your paychecks reflect a different rate, that’s a sign of potential wage theft. 
  • Unpaid “Off the Clock” Work: Being asked to perform work tasks before clocking in or after clocking out is unlawful. This could include setting up, cleaning, or completing closing duties. 
  • Automatic Meal Deductions: Some employers automatically deduct mealtimes from your hours, even if you worked through your meal period. If you’re not receiving compensation for these times, this could constitute a legal violation. 
  • Misclassification: Are you classified as a manager but find that most of your work doesn’t involve managerial duties? Employers might improperly classify workers as exempt to skirt overtime laws. 
  • Discrepancies in Pay Stubs: Keep an eye on your pay stubs. Inaccuracies in hours worked, rates, or strangely calculated overtime could point to foul play. 
  • Ignoring Tipped Employee Regulations: For tipped employees, remember that your overtime is based on the full minimum wage before the tip credit is applied. If this isn’t the case, your rights might be infringed upon. 
  • Pressure to Work Through Breaks or Skip Them Entirely: Legally mandated breaks must be honored, and if you’re coerced to work through them without pay, it’s a violation. 
  • Flat Salary Without Overtime: Some salaried employees in the restaurant industry may still be entitled to overtime pay, depending on their duties and earnings level. Being on a salary does not automatically exempt you from overtime pay. 
  • Retaliation for Inquiring About Overtime Pay: If you face intimidation, demotion, reduced hours, or job termination for asking about overtime pay, it’s a sign that your employer might be violating labor laws. 

The Benefits of Working with a Wage & Hour Firm 

  • Expert Analysis: Wage and hour firms are well-versed in federal and state labor laws and can provide an accurate analysis of your work situation. 
  • Effective Advocacy: Skilled in advocacy, wage and hour firms can represent your interests and communicate with employers on your behalf. 
  • Recovery of Wages: By pursuing legal avenues, a wage and hour firm can assist in recovering any unpaid wages you’re entitled to, including overtime. 
  • Legal Protection: Wage and hour firms can help protect you against retaliation from employers when exercising your rights. 

In the service industry, particularly for restaurant workers in the New York metropolitan area, awareness of overtime pay laws is essential for safeguarding your rights and ensuring fair compensation for your labor. Keep thorough records, understand the FLSA and NY Labor Law, and don’t hesitate to seek assistance from professionals. Working with a reputable wage and hour firm like Cilenti & Cooper, PLLC, familiar with the FLSA and NY Labor Law  can make a significant difference in rectifying wage violations and promoting your overall well-being and financial stability. 



Let us fight to recover the wages you have earned.

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