Early this February, Iron Cactus got served. Literally. The Austin-based Tex-Mex chain, with a location in downtown Dallas, became the subject of class-action lawsuit alleging that it failed to comply with federal employment laws regarding wages and tip-pooling.
According to the suit, Iron Cactus illegally implemented a tip-pooling procedure. Pooling tips between waitstaff is perfectly legal, as long as the tips get dispersed among employees who are regularly tipped: the bartenders, food runners and other front-end employees who interface with customers directly.
At Iron Cactus, according to the suit, four percent of each waitperson's sales was captured at the end of each shift and re-allocated to the "expeditors": the guys running the pass, calling orders and coordinating plates before they're handed to the waiters and waitresses. These employees aren't eligible for tips, according to the suit, because expeditors don't get any face time with the customer.
Iron Cactus says it's not that simple. Policies at each Iron Cactus location are different, the restaurant claims, and expeditors can certainly be tipped. The case will hinge on the definition of what constitutes direct customer interaction.
Restaurants are required to guarantee waitstaff, typically paid $2.13 an hour, a net minimum wage of $7.25 per hour. If a waitperson's tips don't make up the difference, the restaurant has to supplement the employees' pay. If the tip-pooling policy is found to be in violation of federal wage regulations, then all the tips received by the waitstaff will be considered ineligible and Iron Cactus will have to make up the entire difference.
I bussed and waited tables when I was young, and I remember many shifts during slow days where I was lucky to walk out of the restaurant with a few bucks after waiting a single table and rolling up 500 bundles of silverware in cheap green linen napkins. Apparently I was duped.
