WaiterPay – New York Labor and Employment Lawyers

Haru Restaurants Sued for Forcing Waitstaff to Share Tips with Sushi Chefs

Haru Restaurants Sued for Forcing Waitstaff to Share Tips with Sushi Chefs

Haru restaurants in New York City, were hit with a tip theft lawsuit that claimed the restaurants had a tip distribution scheme where sushi chefs would receive a daily portion of the tip pool. The lawsuit claims that the sushi chefs did not perform personal service to customers at a level that is a principal and regular part of their duty and as a result they are not entitled to share tips under either the Fair Labor Standards Act (FLSA) or the New York Labor Laws (NYLL).

Attorneys for the workers also claim that servers, bussers, runners and bartenders were required to perform side work at the start, during, and at the end of every shift which amounted to more than 20% of their work time and an excess of two hours a day. The side work that these tipped employees were required to perform included cleaning bathrooms, sweeping, mopping, setting up and taking out garbage cans, filing soy sauce bottles, folding napkins and restocking. According to the wage theft lawsuit, the restaurants required the workers to perform most of the side work before the restaurant opened or after the restaurant closed and customers had left. Notably the tipped employees were required to come in at 10:30 am for a lunch shift when the restaurant didn’t open until 11:30 am.

Under the FLSA, 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. Haru’s tipped employees are seeking to recover minimum wage, overtime wages, misappropriated tips and call-in pay.

Haru restaurants are part of a chain of sushi restaurants owned and operated by Benihana National Corp. They have previously been sued for discrimination against Hispanics and unpaid overtime and spread of hours.

Mario Batali Accused of Sexual Harassment

Mario Batali Accused of Sexual Harassment

A sex harassment expose by Eater accuses celebrity chef Mario Batali of inappropriately touching four women and engaging in a pattern of sex harassment that has spanned the last twenty years. According to Eater, one woman accused Batali of repeatedly forcibly pulling her towards his body from behind. Another woman accused him of groping her and compelling her to straddle him by blocking her exit. Two of the women allege Batali grabbed or rubbed their breasts during a party.

Following the allegations of sexual misconduct, Batali has announced that he would step away from his company and ABC asked him to take a break from his position as host of The Chew. Batali has not denied the allegations and has offered a public apology saying “I apologize to the people I have mistreated and hurt. Although the identities of most of the individuals mentioned in these stories have not been revealed to me, much of the behavior described does, in fact, match up with ways I have acted. That behavior was wrong and there are no excuses. I take full responsibility and am deeply sorry for any pain, humiliation or discomfort I have caused to my peers, employees, customers, friends and family.”

While sex harassment by household Hollywood names has dominated the media, far too little attention has been focused on the endemic sex harassment which exists in the restaurant industry. The Economist recently reported that while just 7% of working American women are employed in restaurants, a third of all those who bring sex-harassment cases to the EEOC are restaurant workers.

U.S. Department of Labor Proposes New Rules on Tip Sharing

U.S. DEPARTMENT OF LABOR PROPOSES NEW RULES ON TIP SHARING

The U.S. Department of Labor has issued a proposal to change the tip sharing regulations under the Fair Labor Standards Act (FLSA).  Under the proposed rule, workplaces would have the freedom to allow sharing of tips among more employees.  The proposal would help decrease wage disparities between tipped and non-tipped workers – an option that is currently restricted by a rule promulgated in 2011 that has been challenged in a number of courts.

The Department of Labor’s proposal only applies where employers pay a full minimum wage and do not take a tip credit and allows sharing tips through a tip pool with employees who do not traditionally receive direct tips – such as restaurant cooks and dish washers. These “back of the house” employees contribute to the overall customer experience, but may receive less compensation than their traditionally tipped co-workers.  The proposal would not affect current rules applicable to employers that claim a tip credit under the FLSA.

The Department of Labor promulgated tip regulations in 2011 that restricted this option. Since 2011, there has been a significant amount of litigation involving the tip pooling and tip retention practices of employers that pay a direct cash wage of at least the federal minimum wage and do not claim a FLSA tip credit.  There has also been litigation directly challenging the Department’s authority to promulgate the provisions of the 2011 regulations that restrict sharing of tips.

The Department of Labor stated that in the past several years, several states have changed their laws to require employers to pay tipped employees a direct cash wage that is at least the federal minimum wage.  This means that fewer employers can take the FLSA tip credit.  The Department of Labor’s proposed new rule follows these developments, along with serious concerns that it incorrectly construed the statute when promulgating the 2011 regulations.

It should be noted that many states like New York and California, have laws that prohibit tips from being shared between back-and-front-of-the-house employees, and that also explicitly prohibit management from sharing in the pot.

Virginia Area Restaurants to Pay $3M in Back Wages and Damages to Workers

VIRGINIA AREA RESTAURANTS TO PAY $3 MILLION IN BACK WAGES AND DAMAGES TO WORKERS

Six Roanoke, Virginia area restaurants and their owners will pay $1.5 million in back wages and an equal amount in liquidated damages, to 149 employees for Fair Labor Standards Act (FLSA) violations. The settlement, which was entered into in U.S. District Court for the Western District of Virginia, is a result of a U.S. Department of Labor Wage and Hour Division investigation.

The Department of Labor’s investigation found that the restaurants willfully violated FLSA minimum wage and overtime provisions by only compensating servers through tips and not paying the federal minimum wage at one-and-one-half their regular rates of pay when they worked more than 40 hours in a workweek. The restaurants also paid non-exempt kitchen staff – cooks, assistant cooks, and dishwashers – straight time for the overtime hours they worked. Investigators also found the restaurants violated the worker’s rights by failing to keep and maintain accurate records of the hours employees worked as required.

“This resolution secures proper compensation for these hard-working employees, and helps ensure that the law will be followed in the future,” said a representative for the Department of Labor. “The agreement recovers wages owed to employees for work performed years ago,” commented another representative.  “The outcome in this case positively impacts voluntary compliance in the food service industry in Virginia, and will level the competitive playing field for employers that comply with the law.”

Philadelphia Restaurants to Pay Employees Nearly $830,000 for Wage Violations

PHILADELPHIA RESTAURANTS TO PAY EMPLOYEES NEARLY $830,000 FOR WAGE VIOLATIONS

Two Philadelphia restaurants, Tierra Colombiana and Mixto, have agreed to pay 156 employees a total of $830,00 in back wages, liquidated damages and penalties to resolve federal wage theft violations.

An investigation conducted by the Wage and Hour Division of the United States Department of Labor (DOL) found that Tierra Colombiana and Mixto violated the overtime, recordkeeping and minimum wage provisions of the Fair Labor Standards Act (FLSA). Both restaurants are owned by Jorge Mosquera, and are operated by Jorge and Mercy Mosquera. “This resolution restores back wages rightfully earned by hard-working employees,” said a Department of Labor representative. “We encourage all employers to take advantage of the Department of Labor’s education and outreach efforts to help them understand their responsibilities and how to properly comply with the Fair Labor Standards Act.”

The Department of Labor found that servers, bartenders, barbacks, runners, hostesses, kitchen chefs, and dishwashers regularly worked more than 40 hours per week, but were allegedly paid overtime hours worked at a rate of their regular hourly pay instead of at time-and-a-half as the FLSA requires.  The Department of Labor claims that the restaurants also failed to maintain required records and made some illegal deductions from employee wages by taking “breakage fees” out from workers’ paychecks, which resulted in some restaurant workers being paid less than the federal minimum wage. “This enforcement action will ensure that workers are paid for all of the hours they worked, and will go a long way in leveling the playing field for employers in the restaurant industry,” commented another representative.

The restaurants have agreed to comply with the FLSA in the future and protect the workers’ rights, including paying the proper overtime premium. The FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour (note that New York has a higher minimum wage) for all hours worked, plus time-and-one-half their regular rates, including commissions, bonuses, and incentive pay, for hours worked beyond 40 per week.  Employers also must maintain accurate time and payroll records.

Tom Colicchio Comments on Sexual Harassment in Restaurant Industry

Tom Colicchio Comments on Sexual Harassment in Restaurant Industry

Celebrity chef and restaurateur Tom Colicchio wrote an open letter to restaurant workers calling for a “long overdue” conversation, in the wake of the recent sexual harassment allegations in the restaurant industry.

“I’m betting that we’re smart and confident enough to level the playing field and create real opportunity, or at least learn how it’s done from the new crop of women (and men) running their own kick*ss kitchens humanely and winning awards, while parenting young kids. I’m betting we can reinvent our industry as a place where people of all genders feel safe and prepare to lead.”

Busser Sues Mario Batali’s Restaurant for Minimum Wage and Overtime Pay Violations

Busser Sues Mario Batali’s Restaurant for Minimum Wage and Overtime Pay Violations

A former busser employed by Mario Batali’s Babbo Ristorante Enoteca is suing the restaurant to recover minimum and overtime wages, and tips unlawfully retained by the restaurant. According to Octavio Quinones, who worked at Babbo as a busboy  for almost two years, the restaurant willfully failed and refused to pay him at the correct minimum wage and overtime rate, did not provide him with a written wage notice detailing his rate and frequency of pay, and forced the waitstaff to share tips with management.

During his shifts as a busser, Quinones would spend one and a half hours performing side-work, such as cleaning floors and folding napkins. Quinones was paid at the tipped minimum wage for all of his shifts even though he spent more than 20% of his time performing non-tipped side-work. According to the lawsuit, Babbo failed to notify front of the house workers at the beginning of 2017 that the proper full minimum wage was $11 and that it intended to take a $3.50 tip credit. According to the wage theft lawsuit, when Quinones earned overtime pay, Babbo also incorrectly factored in a tip credit.

Restaurants must provide notice before claiming a tip credit towards an employee’s wages. Under the Fair Labor Standards Act and the New York Labor Law, if an employee works over 40 hours per week, that employee must receive overtime pay. Sharing of an employee’s tips with a restaurant manager is strictly prohibited under the law.

Smokey Bones Restaurant Accused of Tip Credit Violations

Smokey Bones Tip Credit Wage Theft Lawsuit

Servers at Smokey Bones Bar & Fire Grill claim that the restaurant chain has engaged in tip credit violations and wage theft, according to a lawsuit filed in South Carolina federal court.

The lawsuit alleges that Smokey Bones, while taking advantage of the FLSA’s tip credit provision, required waitstaff to perform non-tipped side work that was not related to their tipped occupations as servers and bartenders, as well as required them to spend more than twenty percent  of their shifts performing non-tipped side work that was related to their tipped occupations. The servers allege that they were required to pay the restaurants out of their tips when a customer walked out, were required to purchase additional  Smokey Bones t-shirts with their tips, and were never notified that Smokey Bones was paying them less than minimum wage pursuant to the FLSA’s tip-credit provision. The waitstaff also allege that all three of those requirements violate the tip-credit provision.

In a May 31 decision, a South Carolina federal court ruled that conditional certification of a nationwide class of servers and bartenders was warranted. The court held that the waitstaff produced evidence of nationwide Smokey Bones job descriptions for servers and bartenders that on their face require side work. While the court ruled, there is no doubt that requiring side work does not necessarily violate the FLSA, the waitstaff made a sufficient showing that Smokey Bones’ nationwide side work policy potentially caused FLSA violations for all Smokey Bones servers and bartenders. The waitstaff and the other opt-ins’ declarations stated that at least three Smokey Bones locations in three different states all implemented the side work discussed in the server and bartender descriptions in such a way as to require violations of the dual-jobs regulation and/or the FOH’s twenty-percent rule.

Smokey Bones has 67 locations along the East in 16 states including Pennsylvania, New York, North Carolina, South Carolina, Florida, Massachusetts, Rhode Island, Maryland, Illinois, Kentucky, Indiana, Tennessee, Michigan, Georgia, Ohio, and Virginia.

Philadelphia Restaurant to Pay $400,000 to 63 Workers for Wage Theft Violations

Philadelphia Restaurant to Pay $400k to 63 Workers for Wage Theft

Talula’s Garden, a Philadelphia restaurant, has agreed to pay 63 workers $400,000 for wage theft violations, including requiring employees to work unpaid hours, according to a lawsuit initiated by the U.S. Department of Labor. The lawsuit alleges Talula’s Garden violated the overtime, minimum wage, and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

“The workers at Talula’s Garden did not receive the required minimum wage and overtime pay,” said a representative for the Department of Labor. “Our agency is committed to ensuring that workers not only receive the wages they have rightfully earned, but that employers are provided all the tools they need to understand and comply with the law.”

The investigation found that line cooks did prep work off-the-clock before the start of their shifts, resulting in unpaid overtime work.  Servers and bartenders also worked – off-the-clock and without pay – to prepare food, the restaurant, and their individual work stations, resulting in minimum wage and overtime violations. The restaurant also failed to maintain accurate records of work hours for bartenders, servers, and line cooks.

“The off-the-clock work performed by Talula’s Garden employees resulted in clear violations of the Fair Labor Standards Act,” said another Department of Labor employee. The FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour for all hours worked, plus time-and-one-half their regular rates, including commissions, bonuses, and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

Mastro’s Restaurant Accused of Stealing from Tip Pool

tip pool

Tipped employees at Mastro’s Steakhouse in Chicago sued the restaurant in Illinois state court, claiming that the restaurant illegally retained a portion of the tip pool, and failed to pay its servers the correct minimum wage.

Former Mastro’s busser Jose Murata brought the class action in Illinois State Court against Mastro’s, accusing the restaurant of violating Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act when it kept part of the pool of tips shared by its front of the house employees.

Attorneys for the severs claim that “the net effect of defendant’s policies and practices is that defendant willfully failed to pay the full amount of compensation earned and due to plaintiff and all other similarly situated employees,” and that “defendant thus enjoyed ill-gained profits at the expense of its hourly employees, including its Tip Credit Employees and Tip Pool Employees.” The class action lawsuit alleges that “in exchange for said labor, defendant was obligated to plaintiff and each member of putative … class the full amount of wages they earned, including tips. Defendant’s practice of operating an illegal tip pool and its improper taking of the Tip Credit has resulted in defendant’s Tip Credit Employees not being paid the full amount of minimum wages owed to them.” The lawsuit, claims that the restaurant was not allowed to take a  tip credit because it failed to pay the proper amount of wages to its servers.

Restaurants cannot require servers to share their tips with non-service employees who do not customarily and regularly receive tips, such as dishwashers, cooks, chefs, janitors, and managers. Restaurants can require waiters to split their tips from customers with other front of the house employees who provide personal service to customers as a principal and regular part of their duties (such as bussers, bartenders, barbacks, food runners, captains who provide direct food service to customers, and hosts who greet and seat guests).

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