Is it legal to charge staff for their mistakes?
– Anonymous Restaurant Manager, Fine Dining, New York City
Mistakes are frustrating and expensive. A steak overcooked, an extra entrée punched into the POS, the wrong vodka poured, full plates and glasses dropped, or food left to spoil can be heartbreaking and nerve wracking for restaurant owners, who are working on thin margins already. Worse, mistakes may be seen as “no big deal” or a little perq in the employee’s mind: “Oops, I poured the wrong wine. I guess I’ll just have to put this glass aside and drink it later.”
Some restaurants make employees responsible for paying for all or part of the cost of mistakes like these. However, from a legal perspective, mistakes are considered the cost of doing business in most states (including yours). It is not permissible to charge the employee or dock pay. The minimum wage law for restaurants in New York states that “examples of prohibited [payroll] deductions are: (1) deductions for spoilage or breakage; (2) deductions for cash shortages or losses; (3) fines or penalties for lateness, misconduct, or quitting by an employee without notice.”
Andrew Rigie, Director of Operations at the New York State Restaurant Association says, “If a server breaks a plate while cleaning a table or a customer walks out on a server without paying a check an employer may not deduct the cost of the plate or the amount of the unpaid bill from said employee’s wages. It is recommended that employers consult an attorney or labor law consultant to understand how best to address employee mistakes so as to comply with all laws and regulations, while ensuring the employer is able to take responsible action in appropriate circumstances.”
The law underlies the importance of good training and strong management oversight—prevention is best. With a particularly mistake-prone employee, though, be sure to document all these instances so you have a clear case if you need to take action. The laws are similar in most states but check with your state restaurant association or an attorney to learn the specifics for other parts of the country.
Finally, true mistakes are unintentional. If the “mistakes” are an extra zero scribbled on to a stingy tipper’s bill, a bottle of wine falling into an employee’s purse or a round of drinks comped to friends, it’s theft, and that’s a different problem.