A class action lawsuit against Megu Restaurant alleging minimum wage, overtime, and service charge violations has been certified as a class action by a New York federal court.
In a Decision by District Court Judge Analisa Torres, conditional collective and class certification was granted to servers at the restaurant who claimed that non-service employees were unlawfully included in the tip pool.
The disputed issue in the Megu case is the tip eligibility of sushi chefs, stockers, and expediters.
Judge Torres explained in her Decision that Section 3(m) of the FLSA allows an employer to pay “tipped employees” an hourly rate less than the federal minimum wage by crediting a portion of the actual amount of tips received by the employee against the required hourly minimum wage. An employer may not avail itself of the tip credit if it requires employees to share their tips with employees who do not regularly and customarily receive tips. Therefore, an employer loses its entitlement to the tip credit if it requires tipped employees to share tips with (1) employees who do not provide direct customer service or (2) managers. According to Judge Torres when deciding whether an employee customarily and regularly receives tips, courts must determine whether the employee’s job is historically a tipped occupation and whether he has more than “de minimis” interaction with customers as a part of his employment.