An Ohio federal court ordered a Buffalo Wild Wings franchise to pay $296,000 to a group of current and former employees.The court found that the franchise improperly claimed the tip credit in violation of the Fair Labor Standards Act (FLSA) and the Ohio Minimum Fair Wage Standards Act.
Under Section 3(m) of the FLSA, 29 U.S.C. § 203(m), employers may count a portion of a tipped employee's tips toward their minimum wage obligation by taking a tip credit. Before taking a tip credit, employers must satisfy certain requirements, including informing employees that a tip credit will be taken.
The lawsuit was filed by Kayla Pender, a former server at a Buffalo Wild Wings restaurant in Saint Clairsville, Ohio. Pender alleged that the franchisees, which operated Buffalo Wild Wings locations in Ohio and West Virginia, failed to properly notify employees that they were taking a tip credit. Pender also claimed that servers were required to perform non-tipped work, including cleaning, food preparing, and closing duties, while continuing to receive a tipped wage.
After a trial, the court found that the franchise failed to establish that it provided employees with the notice required by the FLSA before taking the tip credit. The court found that the posters and employee handbook did not clearly explain that employees' tips were being used to satisfy part of the employer's minimum wage obligation. The court also found that employees performed non-tipped work while continuing to receive a tipped wage. Although the franchise argued that employees were instructed to clock into a different job code for non-tipped work, the court found that the policy was not consistently followed because employees could not always change their job codes themselves.
The court awarded $296,000 to the employees for the wage theft violations, including unpaid wages and liquidated damages. This case highlights the risks to restaurants when they do not give adequate notice of the “tip credit.”
In New York, employers face additional requirements when taking a tip credit. Under the New York Labor Law (NYLL), employers must provide tipped employees with written notice of the tip credit and other required information at the time of hire. In New York City, Long Island, and Westchester County, the full minimum wage is $17.00 per hour as of January 1, 2026. In these areas for food service workers, employers may take a tip credit of up to $5.65 per hour, meaning they must pay at least $11.35 per hour in cash wages.. For service workers, employers may take a tip credit of up to $2.85 per hour, meaning they must pay at least $14.15 per hour in cash wages.
If a New York employer fails to provide the required notice or otherwise fails to meet the requirements for taking a tip credit, it may lose the ability to claim the credit and could be required to pay employees the full minimum wage for all hours worked.
If you have questions about your rights as a worker or believe you may have been the victim of wage theft or other workplace violations, please do not hesitate to contact the attorneys at Pechman Law Group at 212-583-9500.
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