A New York City server has filed a complaint against her former employer, claiming that the restaurant wrongfully skimmed 2% of her total sales for credit card processing fees. The server, who worked at the establishment for only two weeks, expressed outrage after discovering this practice was not only illegal but also a common occurrence among her coworkers.
After finishing her training, the server received her first paycheck, which showed a deduction of 2% from her total sales. For every $1,000 in sales, she was forced to forfeit $20 to the owners, regardless of whether the transaction was made in cash or via credit card. Unsatisfied with this arrangement, she reached out to her employers to voice her objections, only to be told, “If you don’t like it, quit.” She promptly submitted her one-week notice, which the owners accepted by terminating her employment immediately.
Feeling wronged, she decided to lodge a complaint with the New York State Department of Labor (DOL). Initially, her primary goal was to recover the approximately $90 that she believed was unjustly taken from her, but as she gathered more information, she realized the potential for a larger case. With 15 employees working at the restaurant over the past five years, she calculated that the total loss could amount to thousands of dollars. The DOL responded positively, indicating that she was owed around $5,000.
The case entered mediation; however, the process became contentious. During the mediation session, the server offered to settle for $4,000, but the employer countered with a mere $1,000. Frustrated by the lack of reasonable offers, the server declined the $1,000, believing the DOL would support her case if mediation failed. However, the situation took a turn when she found herself in a hearing against the DOL regarding her unemployment benefits.
In February 2026, an administrative law judge ordered the DOL to produce documents linked to another case. The DOL ignored this subpoena, arguing that their policies prohibited them from disclosing such information. Despite these complications, the server emerged victorious in her unemployment hearing, resulting in an increase in her benefits and a payment of $2,500 for lost wages.
Despite the win, the relationship between the server and the DOL soured. She claimed that they refused to address her concerns regarding a fair hearing for her unemployment benefits, which remained incorrect. In April, she received a letter from Labor Standards declaring that her employer’s retention of 2% for credit card fees was permissible and that there was no evidence of retaliation against her.
Adding to her frustration, the server noted that she was also required to tip out a salaried manager and bartenders, amounting to an additional 6 to 8 percent of her total sales. While she felt comfortable sharing tips with the bartenders, the idea of tipping a salaried manager did not sit well with her.
The server’s experience raises significant questions about the legality of her employer’s practices and the DOL’s subsequent handling of her case. Her understanding that the DOL would represent her in mediation led her to decline the lower settlement, which complicated her financial recovery.
As other workers in similar situations continue to face unjust practices regarding their tips and wages, the server is left contemplating her next steps. She wonders if she can still contest the DOL’s findings, particularly the claim that employers can keep part of tips to offset business expenses. The ambiguity of the situation leaves her seeking clarity and support.
One reader expressed concern over the DOL’s refusal to comply with the judge’s orders, saying, “They should be held accountable for ignoring a subpoena.” Another stated, “It’s frustrating to see this happening when servers already face so many challenges.” With unresolved questions surrounding her case and the DOL’s actions, the server must now decide her next course of action.
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