Ford’s Garage. The Hampton Social. Both are restaurants in metro Orlando that began paying their servers far less than the hourly minimum wage in recent years, sparking protests and questions on online forums like Reddit over whether a restaurant can legally pay a worker as little as a penny per hour.
Under state law, most Florida employees must be paid at least $14 an hour, or $10.98 if you’re a worker who receives tips. This is modeled on the Fair Labor Standards Act, a federal law. But increasingly, employers — particularly restaurants — are turning to a commission-based pay structure in which a server or bartender is paid anywhere from 1 cent (in the case of select Ford’s Garage locations) to around $2 an hour, plus a commission from sales.
Workers at the I-Drive restaurant Hampton Social in 2024 protested their employer’s unexpected shift to a $2 hourly pay for servers — down several dollars from the minimum tipped wage — describing it as “unfair” and a product of “greed.” The employer, however, argued that workers ultimately earn just as much or even more from this model, while allowing the company to “better manage its costs,” according to the Orlando Sentinel.
Marc Brown, CEO of 23 Restaurant Services — the operator of Ford’s Garage locations in Florida — also said staff ultimately earn more this way.
“Our servers under this program actually make more, because we track their hourly pay of what they earn over time, and then we compare it to our restaurants that aren’t on the program,” Brown told the Weekly. “And our servers in this program make more on average per hour than they do in our restaurants that aren’t on this program.”
His company has an entire page on its website dedicated to answering common questions about the commission program and the 20 percent service charge at Ford’s Garage locations where servers are paid a penny wage. They claim that servers and bartenders under this program (bartenders are paid $3 per hour) ultimately earn an average of $18 to $20 an hour “prior to any additional tip.”
With the automatic 20 percent service charge — which does not go to servers or bartenders — 23 Restaurant Services writes, however, that “no tip is expected.” Any tip that’s voluntarily added on top “goes 100% to your server,” the website states. “This is why we say additional tip is never expected but it is accepted.”
Orlando Weekly reached out to a Reddit user who claimed to be a former employee of Ford’s Garage who worked under this commission-based model and wasn’t a fan. We did not hear back from them prior to publication.
Is it legal?
The biggest question floating around the internet about this $0.01 hourly pay, though, is: Is it legal?
According to Orlando-based employment lawyer Ryan Morgan of law firm Morgan & Morgan, “It is.” Though he adds, “There are some guardrails.”
So, what makes it legal for an employer to pay a worker a single penny per hour when the state minimum wage is 139,900 percent higher than that?
It’s all based on a sort of loophole in minimum wage and overtime law for commission-based workers, who are also excluded from overtime pay under the Fair Labor Standards Act. In the restaurant context, this still requires that a worker’s weekly pay amounts to at least minimum wage earnings.
And it typically relies on a mandatory service charge added to customers’ receipts — a charge that, notably, can be distributed however the employer sees fit, even if none of it goes to the server.
At four Ford’s Garage locations that have implemented this commission-based model — including the location at Orlando’s Premium Outlets — customers have an automatic 20 percent service charge added onto their checks, before any tip. Brown said this pay structure was rolled out at the Orlando location about two years ago, and at another location in Kissimmee about three years ago.
He confirmed the 20 percent service charge added to checks isn’t paid out to servers or bartenders, but rather to other staff who provide assistance to servers (running food from the kitchen, clearing tables) so they can stay out on the floor the whole shift.
“That revenue effectively gets split amongst multiple people,” he told the Weekly, adding that restaurants participating in this program have nearly double the support staff on shift to help servers (the $0.01/hour employees they call “service captains”).
Brown said he’s aware of all the negative blowback this commission model (currently in testing mode, he says) has received online. He argues, however, that the criticism isn’t warranted or reflective of the majority. “We have a lot of really happy team members on this program,” he argued. “The ones that execute it and do it right.”
But what it if it’s a slow shift, and servers aren’t really making sales? “We do audit that,” Brown said. “We’ve never run into a situation where a server isn’t paid at least minimum wage, but … we still regularly audit it. If there was a situation when that happened, we would certainly bring them up to minimum wage.”
Morgan, who’s personally not a fan of restaurants’ use of this pay structure, conceded, “From the company side, it is definitely a model which I think … gives you more flexibility. You can kind of do what you want.”
Morgan has confronted this pay structure in legal cases involving allegations of wage theft, including at two restaurants in South Florida where workers sued their employer over the issue. Morgan said the service charge model is “not as rigid in some respects as the tip credit rules are, which are obviously in place to protect people and protect the servers.”
He’s referring to the fact that, under the Fair Labor Standards Act, an employee’s tips cannot be distributed to management, employers or supervisors. The mandatory service charge that some restaurants are tacking onto bills, however, hasn’t been designated as a tip by the courts. “Case law has been very, very employer-friendly on these issues,” Morgan admitted.
In a 2024 opinion from U.S. District Court for the Southern District of Florida, for instance, it was ruled that these auto-gratuities are “a service charge, not a tip, and can lawfully be used to offset an employer restaurant’s wage obligations under the Fair Labor Standards Act.”
A strategy for ‘managing’ mandated pay hikes
Commission-based pay in restaurants has become a growing trend promoted by at least one Tampa-based consultancy firm as a strategy for “managing minimum wage increases.”
Shortly after Floridians voted in 2020 to gradually increase the state minimum wage to $15 an hour (fully effective this upcoming September), the consultancy firm CapServ360 pitched this commission model to restaurants as a new strategy to “replace tipping” and prevent businesses that didn’t want to (or believed they couldn’t afford to) pay their workers more from going under.
“The commission model along with service charge is only one of the options to evaluate to help manage the increase in costs,” CapServ360 notes. “This sole option has many, many iterations to consider and should be rolled out with extreme care.”
A Tampa Bay-based restaurant operator, the Feinstein Group, initially got mixed feedback and news coverage after implementing their own commission model at their fine dining restaurants in 2022. They own The Black Pearl and Sonder Social Club in Dunedin, and The Living Room in Wesley Chapel and Dunedin.
As initially reported in 2022 by Creative Loafing Tampa Bay, bartenders and servers under that program are paid $1/hour, plus a 15 to 16 percent commission on sales. The separate 20 percent service charge the Feinstein Group adds onto customers’ checks, similarly, goes to front-of-house staff.
“The main reason we did this was to ensure livable wages for all staff in the restaurant and a guaranteed and consistent income for previously tipped employees,” Zach Feinstein, one of the restaurant group’s founders, told CL.
Several staff members, however, were reportedly let go after the implementation of the model, with at least one fired staffer alleging that they were fired due to their pushback on the commission-based pay. Feinstein denied this allegation at the time.
CapServ 360 CEO Charles Musgrove Jr. — who advocated for this model — previously served on the “Minimum Wage Task Force” of the Florida Restaurant and Lodging Association, a business group and influential lobbying force that led an opposition campaign to Florida’s $15 minimum wage ballot measure in 2020.
The FRLA, a group that has also backed rollbacks to child labor law in recent years, argued that raising the minimum wage would unduly burden business owners, “kill jobs” and shut down businesses.
Related Stories
Gov. DeSantis signs bill weakening Florida’s child labor laws
Musgrove himself joined Brown of 23 Restaurant Services and Feinstein of the Feinstein Group on a FRLA-hosted panel in 2022 about the commission pay model, in addition to Steven Sapp of Shades Bar & Grill (Inlet Beach), Tyler Jarvis of Jackacuda’s Seafood & Sushi (Destin) and Kyle Green of Kyle G Restaurants (along the Treasure Coast).
Morgan, the labor attorney, confirmed that he’s received more complaints about this commission-based pay model from workers in recent years, and not just in Florida either. “There’s certainly appeal for these restaurants to use this, because they don’t have to pay time and a half overtime and their labor budgets are more directly tied to their sales.”
At the same time, the workers directly affected aren’t generally afforded a say in these changes. “What they don’t love about the service charge and the commissions is it basically gives the company freedom to do whatever they want,” Morgan said, referring to his clients who have filed lawsuits over the issue.
Does this commission model always result in reducing income? Not necessarily, Morgan conceded, thinking back to his clients’ pay stubs. But he still sees it as a sneaky move that can be a big “culture shock” for service staff.
“Our wage-and-hour lawyers that do this, we all think it’s kind of hogwash that they’re bootstrap[ping] this issue into this commission exemption that’s really not meant to cover this area under the law,” he said. “We don’t think it’s the right thing from a big-picture society perspective.”
If you are a commission-based worker at Ford’s Garage or another restaurant in Central Florida who is paid less than minimum wage in hourly pay, contact reporter McKenna Schueler at mckenna@orlandoweekly.com to share your story.
Orlando’s daily dose of what matters. Subscribe to The Daily Weekly.
Related Stories
Florida Republican revives effort to allow minimum wage exemption for certain workers
Florida AG candidate vows to enforce minimum wage law, if elected
Restaurant worker at Universal Orlando Citywalk files lawsuit over wage theft
Subscribe to Orlando Weekly newsletters.
Follow us: Apple News | Google News | NewsBreak | Reddit | Instagram | Facebook | Bluesky | Or sign up for our RSS Feed
