The practice is prohibited in some states, such as California and Colorado, but it is legal under federal labor laws. Where permissible, some operators continue to make servers pay the proportion of the fees related to tip amounts, despite controversies and the risk of losing disgruntled employees.
...
?Federal law expressly allows for the practice of deducting the credit card charge from tips left on a credit card. Where allowed by state law, this is our practice,? Landry?s executive vice president Steven Scheinthal said in a statement. He declined to comment further.
Landry?s policy was upheld in a Houston federal court a few years ago in a class-action suit filed against the chain on behalf of six servers at a Joe?s Crab Shack in Chicago.
The Fair Labor Standards Act permits an employer to deduct the processing fee from an employee?s tip as long as the deduction does not put the employee?s pay below the minimum wage.
In Colorado, the practice invalidates the state?s tip credit, which makes it impractical for employers, said Pete Meersman, chief executive of the Colorado Restaurant Association.
California?s Legislature banned the practice in 2001 after a state superior court decided in favor of the deduction. The state judge had ruled it permissible for Specialty Restaurants Corp. of Anaheim to assess the fee from servers? tips.