The practice is against Nevada law, but the U.S. Department of Labor says the practice is legal according to the Fair Labor Standards Act.

Johnson said although there are often complaints filed with his office over tips, he isn't sure how many Nevada employers engage in this particular practice.

"I don't know how common this practice is. I hear about it occasionally. We have received at least a complaint. It resulted in this employer questioning the interpretation of the law," Johnson said.

Johnson said his office has received calls from Nevada employers seeking clarification on the state's stance on the tip deduction practice. Johnson said he soon expects to decide whether to write a new regulation that clarifies the state's stance on the practice.

Van Heffner, president and CEO of the Nevada Restaurant Association, said the issue needs clarification.

"It's very confusing because many corporate restaurants interpret the federal law very differently than this," Heffner said.

Two Las Vegas-area Joe's Crab Shack restaurants are part of a group of at least 150 Landry's-owned restaurants across the country that allegedly deduct 3 percent of the servers' credit card tips to pay the transaction fee to credit card companies, according to the lawsuit.

Houston-based Landry's Restaurants has four restaurants in the Las Vegas Valley. They include a Landry's Seafood House in Las Vegas, a Joe's Crab Shack restaurant in Las Vegas and another in Henderson as well as a Rainforest Cafe at the MGM Grand. The company also has a Chart House restaurant in Lake Tahoe.

Tim Fox, an attorney for the servers in the lawsuit, said the allegation is based on a list provided by the company during discovery in early 2003.

Steve Scheinthal, general counsel for Houston-based Landry's Restaurants, denied that the company engaged in the practice in Nevada.

"In states where the practice is prohibited we abide by state law," Scheinthal said.

However, a worker at a Las Vegas Valley area Joe's Crab Shack said the company does deduct the fee out of workers' credit card tips. The worker, who requested anonymity, wasn't critical of the practice.

"I don't have a problem with it, it's not a huge amount of money," the worker said.

When asked about the worker's comments, Scheinthal said that if the fees are being taken out, they're not supposed to be.

"It could have been a mistake in the system, but it's not supposed (to be). It shouldn't be. I'm not aware that it is," Scheinthal said.

Fox hopes the lawsuit, originally filed in 2002 in Illinois and moved to Texas in 2003, will gain class-action status from a Houston federal judge.

The practice is legal according to the U.S. Labor Department, but state laws vary on the issue. The practice is illegal in Nevada, along with another practice legal in some states of paying servers a "tip credit," or half of the minimum wage, to be supplemented by expected tips.

The six named plaintiffs worked at a Joe's Crab Shack restaurant in Downers Grove, Ill.

Fox said he isn't seeking to litigate the case in states where it is illegal to pay the tip credit, such as Nevada.

Scheinthal said Fox's case lacks merit.

"The Department of Labor has approved the practice. When you have the DOL that says this is an approved practice and it's been around for 30 to 40 years, I don't know what to make of a lawsuit that says you can't do this when the federal government has said it's already OK," Scheinthal said.

Heffner said Nevada's restaurant industry is taking great interest in the issue because of the cost of credit card fees. He added that because restaurants take credit cards as a form of payment, they attract more customers and servers ultimately make more tips.

"For a restaurant owner and operator it can be very expensive to handle the credit card processing. We do it as a convenience for our patrons," Heffner said.

Alana Roberts covers courts and labor relations for In Business Las Vegas andits sister publication, the Las Vegas Sun. She can be reached by e-mail at alanar@lasvegassun.com or at (702) 259-4059.