Japanese Restaurants Hit By Wave of Overtime and Tip Stealing Cases

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Japanese Restaurants Hit By Wave of Overtime and Tip Stealing Cases

sharaku restaurant front

Japanese restaurants in New York have been under siege in the last several months as employees and the United States Department of Labor have filed lawsuits claiming unpaid overtime, unpaid minimum wage, and violations of tip pooling provisions of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.

Recently, Sharaku in the East Village was hit with a wage and hour lawsuit.  In Solis v. Sharaku, Inc., 10 Civ. 8845 (RJH), the United States Department of Labor accused Sharaku of failing to pay minimum wage and overtime and also failing to keep and preserve accurate employee time records.  A consent judgment was entered in this case for $64,193.78.  Other Japanese restaurants that have been sued this year include Morimoto, Benihana, Sushiden, Monster Sushi, and the chain of East restaurants.

One of the interesting issues that sometimes arises with Japanese restaurants is whether sushi chefs should be permitted to participate in the tip pool.  Notably the United States Department of Labor issued an opinion letter on December 19, 2008 which stated that sushi chefs may participate in tip pools and be considered tipped employees under the FLSA if they have direct contact and interact with customers in the same manner as a counterperson in a restaurant.

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