Joe’s Crab Shack Hit With Nationwide Class Action Suit for Alleged 80/20 Rule Violations

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Joe’s Crab Shack Hit With Nationwide Class Action Suit for Alleged 80/20 Rule Violations

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Servers, bartenders, and bussers at Joe’s Crab Shack restaurant have filed a nationwide class action lawsuit alleging that the restaurants paid them a tipped minimum wage even though they perform non-tip producing duties, such as washing dishes, kitchen prep and janitorial tasks, commonly referred to as “back of the house” duties.  Attorneys for the workers also claim that waiters and bussers were required to perform “closer duties” and “running sidework” in excess of 20% of their work day.

Under the Fair Labor Standards Act (“FLSA”), employers are allowed to take a “tip credit” and pay waiters, bussers, and bartenders below the federal minimum wage of $7.25 per hour.  For example, the “tip credit” for waitstaff in New York is currently $2.25 per hour, meaning that waiters, busboys, and bartenders can be paid an hourly minimum wage of $5.00 per hour.  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.

Restaurant workers and employers in New York State should note that the twenty percent rule is already in effect for waiters, bussers, and bartenders in New York.  The New York State Department of Labor’s Hospitality Wage Order specifically provides a twenty percent rule for restaurants that take a “tip credit.”  Subpart 146-2.9 of the Hospitality Wage Order states:

On any day that a service employee or food service worker works at a non-tipped occupation (a) for two hours or more, or (b) for more than twenty percent (20%) of his or her shift, whichever is less, the wages of the employee shall be subject to no tip credit for that day.

The case against Joe’s Crab Shack was filed in federal court in Buffalo, New York.  The lawsuit seeks back wages, penalties, and attorney’s fees and an injunction to protect workers rights.

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