Economy & LaborFEB 12, 2025

Server Gets A Life-Changing Tip, Boss Says He Can’t Keep It: “Excuse Me, What?”

We often hear about restaurant staff battling to make ends meet. Many work long hours and rely on tips to survive. On top of this, they sometimes have to deal with rude customers who "are always right." A Firebirds Wood Fired Grill server couldn’t believe his luck when a customer recently tipped him $2,500 on a $150 restaurant bill. It was a life-changing moment for the struggling waiter.

But his happiness was short-lived... When the server showed his manager the bill, they swiftly said the employee would not be receiving the tip. Instead, the restaurant would be "voiding" the transaction so that they weren't hit with any unexpected hefty chargebacks. The shocked server believes he's been robbed and is now seeking advice.

A restaurant server isn't exactly the highest-paid job in the world, but it does help to put food on the table

Image credits: asmedvednikov / freepik (not the actual photo)

One server was over the moon when he received a $2,500 tip, only for his manager to say he couldn't keep it

Image credits: koldunov / freepik (not the actual photo)

Firebirds once had to pay out $2.5M after servers took them to court for keeping tips

Image credits: Sam Dan Truong / unsplash (not the actual photo)

The “Tip Regulations under the Fair Labor Standards Act” took effect on April 30, 2021. According to the U.S. Labor Department, "An employer cannot keep employees’ tips under any circumstances; managers and supervisors also may not keep tips received by employees, including through tip pools. This prohibition applies even if tipped workers are paid hourly at rates equal to or above the full minimum wage."

“Tips are seen as the property of employees only, so if owners are skimming their tips, they’re taking part in wage theft,” notes tip management platform Kickfin. “The practice is often called ‘tip pocketing’, as servers (rightfully) view this as their employers grifting their hard-earned tips.”

Kickfin warns that there are major repercussions to wage theft, and doing so could cause an entire business to crumble. Among the consequences: payback. The restaurant could be ordered to give all of the money back to the employees, plus a fine of over $1,100 per violation. Restaurants can also be sued for damages, warns Kickfin. "The consequences and fines for violating tip laws apply, whether you were aware it was illegal or not," notes the site.

It’s not the first time Firebirds has come under fire for withholding employees’ tips. In 2019, the restaurant chain agreed to pay $2.5M to settle wage theft claims of approximately 7,050 servers at Firebirds restaurants across the country.

Plaintiff Josh Nolen filed his class action lawsuit in 2017, accusing Firebirds of violating the Fair Labor Standards Act (FLSA). According to the lawsuit, the restaurant exploited FLSA tip credit provisions, "which allow businesses to pay their workers below minimum wage if they are also paid tips."

Nolen told how he was paid $2.15 per hour and relied on tips to survive. The so-called “tip credit” on top of his basic hourly rate would have allowed him to take home the federal minimum wage of $7.25 per hour (at the time). Firebirds was accused of violating the FLSA by paying below minimum wage and keeping their employees' tips.

According to reports, the restaurant chain was also outed for requiring its servers at all locations to “spend more than 20 percent of their work time performing non-tipped duties, or ‘side work’ activities.” Basically, waiters and waitresses had to make coffee, clean counters and machines, sweep floors, stock glasses and napkins, refill condiments, and polish silverware.

On top of all this, lawyers argued that Firebirds didn’t track how much time its servers spent doing non-tipped work. Therefore, the restaurant "routinely [failed] to pay their servers the federal minimum wage."

The end result? A massive settlement agreement, and a damaged reputation.

However, legal experts noted that the settlement didn't mean Firebirds admitted to any wrongdoing. "Instead, the settlement provides resolution for both parties while also avoiding the potential costs of continued litigation."

In 2022, a New Hampshire restaurant, Dos Amigos Burritos, was ordered to pay $61,788 in tips and liquidated damages for 39 workers. As per USA Today, the restaurant had “wrongfully included managers in its employee tip pool.”

“Tipped workers in the food services industry rely on their hard-earned tips to make ends meet. Restaurant employers must understand that keeping workers’ tips or diverting a portion of these tips to managers or supervisors in a tip pool is illegal,” said the U.S. Department of Labor's Wage and Hour Division's Steven McKinney in a statement at the time.