A former sous chef at a Kona Grill location in Florida claims the restaurant purposefully misclassified him to avoid paying him overtime wages, in violation of the Fair Labor Standards Act (FLSA). The sous chef alleges Kona Grill, which operates 45 restaurants in 23 states and Puerto Rico, intentionally misclassified all its sous chefs, as well as assistant general managers, and assistant managers as exempt and not entitled to overtime wages at time- and-a-half their regular hourly rate for all hours worked over forty each week.
Attorneys for the sous chef say he worked, on average, 55 to 60 hours per week, and some weeks would work more than 60 hours. He claims Kona Grill paid him a set salary each week regardless of the number of hours he actually worked, which he says was done on purpose in order to avoid paying overtime pay. The FLSA provides that employees are entitled to time and a half for every hour they work over 40 a week. Employees employed in an executive capacity are exempt from overtime pay under U.S. Department of Labor Regulations. An “executive” employee is:
- compensated on a salary basis at a rate of not less than $455 per week (in New York City, $825 per week);
- has a primary duty of management of the enterprise in which the employee is employed;
- customarily and regularly directs the work or two or more other employees; and
- has the authority to hire, fire, or promote other employees.
According to attorneys for the sous chef, the misclassified restaurant workers had primary work duties including cooking, cleaning, preparing food and stocking food, and other forms of manual labor. They also claim the workers did not supervise other employees and never had any authority to hire or fire other employees. Other restaurants which have allegedly cheated sous chefs out of overtime pay by misclassifying them a managers include P.F. Chang’s, Serafina, and 9021Pho Restaurants in California.
Today is National Waiters and Waitresses Day, but many restaurants in New York will continue to pay their waitstaff incorrectly today, as they do everyday.
If you are a server, runner, bartender, or busser in New York, you should know your rights. Here are ten wage theft violations that you need to know about:
- Management Stealing TipsOwners and managers cannot take a share of the waitstaff’s tips for themselves or use tips to pay for kitchen workers or non-service staff.
- Minimum Wage
Restaurants in New York are required to pay their waitstaff either a minimum wage (ranging between $9.70 and $11.00 depending on size of employer and location) or a tipped minimum wage ($7.50 per hour in New York).
- Overtime Pay
Restaurants are supposed to pay their workers overtime at an overtime rate of one and one-half times the worker’s regular rate of pay for all hours worked above 40 per week.
- Notice of Tip CreditRestaurants must give waiters, waitresses, runners, bartenders, and bussers proper notice of a “tip credit” before paying them the reduced minimum wage of $7.50.
- Misappropriation of “Service Charge”
New York restaurants cannot keep the fixed gratuity or “service charge” charged to customers when the customers believe that it is a tip going to waitstaff.
- Spread-of-Hours Pay
New York restaurants are required to provide their workers with an extra hour of pay at the full minimum wage rate whenever the length of their work day exceeds ten hours.
- Credit Card Fees
An employer may deduct no more than the credit card processing fees assessed on the charged tips. In other words, the restaurant cannot deduct 5% from your tips for credit card fees if the credit card companies are only charging the restaurant 3% to process the payment.
- Charging for Customer Walkouts
Servers should not be charged for customers who dine and dash.
- Breakage Charges
Servers do not have to pay for broken plates or glassware.
- Uniform MaintenanceWaitstaff should not be charged for buying or cleaning a uniform.
Gallagher’s Steakhouse in New York City and its owner, long time Long Island Restauranteur Dean Poll has been sued for wage theft, including failure to pay minimum wage and overtime pay, in violation of the Fair Labor Standards Act and the New York Labor Law. In the lawsuit, a former waiter at the restaurant claims Gallagher’s paid all front of the house employees working at the restaurant at the tipped minimum wage, which is currently $7.50 per hour in New York, without giving them notice of the restaurant’s intent to utilize the tip credit. The lawsuit states that due to the misuse of the tip credit, Gallagher’s paid its workers the wrong overtime rate for all hours worked each week over forty.
Dean Poll, who owns Gallagher’s Steakhouse as well as The Loeb Boathouse in New York City’s Central Park, is accused of “blatantly stealing wages” from Gallagher’s wait staff. Attorneys for the worker allege that Gallagher’s automatically deducted pay for restaurant workers’ thirty-minute lunch breaks, even though the restaurant knew that the workers were not actually taking these breaks. As a result, wages for the waitstaff were cut by two and-a-half hours each week. The wage theft lawsuit also claims that Gallagher’s failed to provide servers with proper notice of wages at their time of hiring and accurate pay statements with each payment as required under the New York Labor Law.
Pechman Law Group has successfully settled several cases for restaurant workers employed at New York City steakhouses, including a record $3.15 million settlement with Sparks Steak House in New York City for an illegal tip pooling scheme.
Our article on the growing trend of wage theft lawsuits against popular restaurant chains was published on the Huffington Post.
A Turkish bakery’s attempts to exclude its bakery workers from the protections of the Fair Labor Standards Act (“FLSA”) was rejected by Magistrate Judge Ramon Reyes. The workers in the lawsuit, filed by Pechman Law Group, made and served Turkish treats at Gulluoglu Baklava & Cafe locations in Brighton Beach and Astoria. Gulluoglu is well-known throughout Turkey for its baked goods. Although formally trained to make pastry and baklava, these bakers allege making little from scratch. They baked bread, served coffee, and performed other non-skilled tasks, but most of their work consisted of adding finishing touches to reheated baklava and cakes imported from abroad. Gulluoglu paid the bakers a fixed weekly salary, which the workers assert did not properly compensate hours worked over forty in a week. The bakers sued to recover unpaid overtime pay, as well as spread-of-hours pay as required under New York Labor Law.
Gulluoglu attempted to have the case dismissed by arguing that the bakers were creative professionals and therefore exempt from the FLSA’s overtime provisions. The creative professionals exemption specifically requires that an employee’s primary duty involve “invention, imagination, originality or talent.” In his Report to the district judge, Judge Reyes found that by reheating baklava and frosting pre-made cakes, the bakers did not use any of the creativity or originality envisioned by the exemption. Applying it here, the judge said, would “extend it to virtually every chef save those who work with pre-made food.” Even assuming that the exemption applied because the chefs made bread from scratch, Judge Reyes found no evidence that bread-making was their primary duty. Absent this evidence, the magistrate judge concluded that Gulluoglu had not proven any of their defenses.
Judge Reyes’s recommendation not to apply the exemption and allow the bakers to present their wage claims will be reviewed by the United States District Court Judge Dora L. Irizarry.
A little over one year after filing a wage and hour lawsuit against La Piccola Fontana, workers now sue the restaurant for retaliation. Located in Hilton’s San Juan Hotel and Casino in Carolina, Puerto Rico, La Piccola has a sister restaurant in the island’s Waldorf Astoria hotel, El Conquistador. In 2015, several waiters and bartenders brought suit on their behalf and other workers’ behalf in the federal court of Puerto Rico, alleging violations of federal and Puerto Rican minimum and overtime wage laws.
That complaint asserts that La Piccola improperly applied a tip credit against the waitstaff’s wages because it failed to notify waitstaff of the laws establishing the tip credit and imposed an invalid tip pool in which managers were incorrectly included. The Fair Labor Standards Act (“FLSA”) currently sets the minimum wage at $7.25, except for workers under 25 years of age who, for their first ninety days of work, can be paid as little as $4.25 under the new law called PROMESA (the Puerto Rico Oversight, Management, and Economic Stability Act). If properly claiming the tip credit, an employer must pay tipped workers at least $2.13 an hour.
According to the most recent complaint, La Piccola later closed for renovations in late 2016, promising the waitstaff suing the restaurant that they would be able to continue their jobs once renovations completed. Those workers say that they were not called back to work when La Piccola reopened in 2017. They claim that the restaurant refused to continue employing them in retaliation for complaining about their unpaid wages, in violation of the FLSA, the Puerto Rico Unjust Dismissal Act, and Puerto Rico Retaliation Act. The suit seeks over $1 million in damages for economic and mental suffering alone. The workers’ original claims could not be resolved at mediation and are now proceeding to trial.
Hamden Town House Restaurant in Hamden, Connecticut has been sued for wage pay violations by workers, employed at the diner as dishwashers, busboys, prep cooks, and cooks. Attorneys for the workers claim the diner required the workers to work between 53 and 72 hours every week and paid them a salary which resulted in hourly pay rates as low as $3.14 per hour, well below the minimum wage. They also allege the diner never paid them any overtime premium for weekly hours worked over 40. The workers also claim they were not given rest breaks despite consistently working 11 or 12-hour shifts, and that they had to work as many as eight straight hours before they could take a lunch break.
According to the lawsuit, the Connecticut diner paid the workers in cash, without any receipts or use of a time keeping system. The workers claim they were required to sign a book each week that inaccurately listed their hours and pay. The owners consistently either reduced the number of hours they worked, or falsely recorded their pay as higher than it really was. If they refused to sign off on the information in the book, they were paid nothing at all. Also, according to one worker, the owners periodically deducted approximately twenty dollars from his pay without explanation.
Connecticut’s current minimum wage is $9.60 per hour. The tipped minimum wage is currently $6.38 per hour for tipped workers (or $8.23 per hour for bartenders). The Connecticut Department of Labor also requires employers to pay employees a rate of at least one and a half times their regular rate of pay for all hours worked over 40. Further, employers in Connecticut must keep accurate wage records for all employees. Tipped workers in Connecticut must also sign weekly tip credit statements confirming that they are aware of the tipped minimum wage regulations in Connecticut and that they received a sufficient amount of payment via tips to be eligible for the tip credit.
Pechman Law Group recently settled a wage payment case against Maine Fish Market in East Windsor, Connecticut for $750,000. In that case, the workers alleged that the restaurant failed to give its servers and bartenders tip credit statements as required by Connecticut law, required them to pay for breakages, customer walkouts, and uniforms, and took ten to fifteen percent of each servers’ tips on a daily basis to pay other employees’ wages.
A former restaurant worker at three of David Bouley’s New York City restaurants and event spaces claims the world-famous Bouley institutions failed to pay tipped restaurant employees minimum wage and overtime pay in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.
The worker, who was employed as a runner at Bouley Restaurant, Bouley Test Kitchen, and Bouley Botanical from June 2010 to September 2016, also alleges that the restaurants required workers to pay to clean and maintain their uniforms out of their own pockets, and failed to provide workers with a pay notice or accurate wage statements, in violation of the New York Labor Law.
In the collective and class action lawsuit, filed in federal court in the Southern District of New York, the runner asserts that the Bouley restaurants paid tipped employees, including captains, servers, front waiters, assistants, bussers, runners, and baristas at the tipped minimum wage, currently $7.50 in per hour in New York, while requiring them to share their tips with non-service employees. Specifically, the runner claims the Bouley restaurants permitted expediters, who are back of house employees with little to no direct customer interaction, to participate in the tip pool. He also says the restaurant never gave the tipped workers notice of its intent to use the tip credit provision.
According to the FLSA, employers can take a “tip credit” and pay tipped employees below the federal minimum wage. The United States Department of Labor regulations provide, however, that a restaurant will not qualify for the “tip credit” when tipped employees share tips with non-tipped workers who do not customarily and regularly receive tips, or when tipped workers do not receive notice of an employer’s intent to claim the tip credit.
An Arby’s fast food restaurant in Vero Beach, Florida cheated workers out of overtime pay, according to a lawsuit filed by a former cashier at the restaurant. Attorneys for the employee claim that Arby’s paid workers at the restaurant straight-time wages for all hours worked, including hours worked over forty per workweek, in violation of the Fair Labor Standards Act (FLSA).
The primary duties of the worker who brought the lawsuit consisted of tasks such as serving as cashier, assisting customers with their orders, food preparation and cleaning. She regularly worked approximately 55 hours per week, but Arby’s failed to pay her time and one-half her regular rate of $9 per hour for all hours worked over forty. Instead, they paid her a straight-time wage of $9 for hours over 40 in a week. Attorneys for the workers are seeking to recover unpaid overtime wages for the workers at the restaurant, liquidated damages, and attorneys’ fees.
Fast food restaurants across the country have been hit with overtime lawsuits because they either pay employees a weekly salary, pay shift pay, or pay hours worked after 40 on a straight-time basis. For example, the United States Department of Labor (DOL) found that Subway restaurants throughout the United States committed wage violations in more than 1,100 investigations over the period from 2000 to 2013. Combined, these investigations led to Subway franchisees reimbursing Subway workers more than $3.8 million. According to CNN, after Subway, the next most frequent wage violators in the fast food industry are McDonald’s and Dunkin’ Donuts.
Pechman Law Group recently settled overtime cases for a worker at a 7-Eleven on Long Island for $60,000, two restaurant workers at Oaxaca Taqueria Restaurants in Manhattan for $82,500, and a Dunkin’ Donuts worker in Queens for $30,000. Under the FLSA, employees must receive overtime pay for hours worked over 40 in a workweek at a rate of at least one and a half times their regular rate of pay.
New York State Red Robin Restaurants have agreed to pay $900,000 to current and former servers to settle claims for tip splitting violations and violating the 80/20 rule.
The Red Robin Restaurants required their servers to share tips with expediters, even though expediters had little to no direct interaction with customers. Expediters do not customarily and regularly receive tips. The restaurants took a tip credit to pay the waitresses, waiters, and bussers a tipped minimum wage. Under the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”), however, employers lose the privilege of paying workers a tipped minimum wage when they require tip sharing with workers who are not entitled to tips, such as expediters or other back of house workers.
The servers also allege they spent more than twenty percent of their shifts performing side work, including cleaning, preparing food, refilling condiments, and stocking and replenishing the bar and food stations. Under the FLSA and NYLL, employers are allowed to take a “tip credit” and pay waiters, bussers, and bartenders below the federal minimum wage. The United States Department of Labor regulations provide, however, that a restaurant will not qualify for the “tip credit” for employees that spend more than 20% of their time performing non-tipped work.
The $900,000 settlement was preliminarily approved by Gary R. Brown, a federal magistrate judge in New York. The settlement includes all 16 Red Robin Restaurants located throughout New York State and covers 2,153 servers who worked at any New York Red Robin from January 20, 2010 to December 31, 2016. A fairness hearing in the case is scheduled for June 2017.
The settlement fund will be distributed among current and former New York State Red Robin servers based on the number of tipped hours they worked during the period January 20, 2010 to December 31, 2016. Red Robin settled a similar wage theft lawsuit with Pennsylvania restaurant workers in 2016 for $1.3 Million.