T.G.I. Friday’s Hit with Tip Credit Lawsuit

A former server at T.G.I. Friday’s in Honeoye Falls in Upstate New York has filed a class action lawsuit alleging violations of the tip credit provisions of New York Labor Law (NYLL) and the Fair Labor Standards Act (FLSA). The lawsuit, filed in the Northern District of New York, alleges that T.G.I. Friday’s did not give its waiters, waitresses and busboys proper notice that it was taking a tip credit, and therefore is required to pay tipped employees at the full New York minimum wage of $8.75 per hour. United States Department of Labor guidelines provide that, in order to be able to apply the tip credit toward the minimum wage under the FLSA, a restaurant must inform its employees “of the amount of cash wages the employer is paying a tipped employee, the additional amount claimed by the employer as a tip credit, that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee, that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips, and that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.” The  New York Hospitality Wage Order similarly provides that a restaurant “may take a credit towards the basic minimum hourly rate if a service employee or food service worker receives enough tips and if the employee has been notified of the tip credit.” In New York, servers are entitled to receive a wage of at least $5.00 per hour, and credit for tips shall not exceed $3.75 per hour, provided that the total of tips received plus the wages equals or exceeds $8.75 per hour. The Hospitality Wage Order provides that “prior to the start of employment, an employer shall give each employee written notice of the employee’s regular hourly pay rate, overtime hourly pay rate, the amount of tip credit, if any, to be taken from the basic minimum hourly rate, and the regular payday. The notice shall also state that extra pay is required if tips are insufficient to bring the employee up to the basic minimum hourly rate.”