Is it illegal to charge a server for a meal that a guest walked out without paying?

I’m an HR manager and I just found out we practice this with our waitstaff. I think it is illegal. I do know that we cannot take them below the minimum wage threshold. We pay our servers $3.50 an hour, but I’m not sure how much of their tips contribute to this formula.

Asked on April 3, 2017 under Employment Labor Law, South Carolina

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

For a "dine and dash", an employee can only be charged if they have previously agreed to be held liable for unpaid meals. Therefore, if they servers are informed of the policy in advance and still agree to work for you, then they have tacitly agreed to the policy. That having been said, as an employer it is best to obtain an employee's consent to this in writing upon the start of their employment. Additionally, after the charge for the unpaid meal, a worker's wage cannot go below the applicable minimum wage. 

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

IF employees have notice of this policy before they are charged--so that by working there with knowledge of the possibility of paying, they can held to have effectively agreed to the policy (i.e. to paying if necessary), this is legal, so long as even with the charge, they do not drop below minimum wage for the week, given their total earnings vs. total hours worked. Employees can agree, either explicitly or implicitly (by their actions) to pay charges.


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