Home » Blog

Philadelphia Restaurant and Market to Pay $660K for Overtime Violations

reading terminal market overtime issue

A produce market and a restaurant at Reading Terminal Market will pay $660,117 to settle overtime claims.  The settlement is for back wages and liquidated damages for 140 present and past workers to resolve violations of the federal Fair Labor Standards Act.

Department of Labor investigators found that Iovine Brothers Produce and Molly Malloy’s restaurant, which operates out of the Reading Terminal Market in Philadelphia, Pennsylvania, violated the overtime and recordkeeping provisions of the FLSA.  The investigation determined that the companies failed to pay overtime at time-and-a-half when employees at the produce market and restaurant worked more than 40 hours in a workweek.  Instead, the employer paid for the overtime hours at straight time rates, in cash.  The failure affected regular hourly employees, and tipped employees, such as servers and bartenders. The employer also failed to maintain some of the payroll records required by law. A civil money penalty of $62,007 was assessed due to the willful nature of the wage theft violations.

“For workers in the restaurant and service sectors, money earned through overtime can make a big difference to their livelihood,” said a Department of Labor spokesman. “For employers in this competitive industry, maintaining a level playing field is critical.  Our top priorities are to ensure that workers are aware of their rights, and to help companies come into compliance with the law.”

The federal FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour ($11.00 per hour for workplaces with more than 10 workers in New York City), for all hours worked, plus time-and-one-half their regular rates for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

IHOP Assistant Manager Received $40,000 Settlement for Overtime Claims

ihop assistant manager overtime pay lawsuit

An IHOP franchisee restaurant on Staten Island, New York will pay $40,000 to a former assistant manager to settle a lawsuit for unpaid overtime wages.  The assistant manager claimed that IHOP failed to pay her overtime wages for hours worked over forty per workweek.  This lawsuit continues a recent trend of restaurant workers alleging misclassification as Assistant Managers so they would be “exempt” from the FLSA requirement to receive overtime pay at time and a half for hours worked over forty in a workweek.

Only a limited number of employees in restaurants are “exempt” from the requirement of overtime pay under the federal Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL).  In order to qualify as an “exempt” under these laws, a restaurant worker has to fit within the administrative, executive, or professional exemption.  So, if a restaurant is paying a cook, maître’d, bookkeeper, host, or other non-management employee a salary for a workweek in excess of 40 hours, it is unlawfully failing to pay the employee overtime — regardless of how much the employee is paid.

The assistant manager was represented by Gianfranco Cuadra, an attorney at Pechman Law Group.  Congratulations to Franco on a successful litigation and negotiation of an excellent settlement.

 

 

New York City French Restaurant Bagatelle to Pay $1.1 Million for Tip Credit Violations

server restaurant image waiter tip credit

Bagatelle will pay $1.1 million to settle a wage theft lawsuit claiming that the restaurant misappropriated the tips of its food service employees and improperly used a tip credit to pay restaurant workers less than the minimum wage, in violation of the Fair Labor Standards Act and the New York Labor Law.  Bagatelle, the popular upscale French restaurant located in New York City’s Meatpacking District and self-described “NYC institution” is alleged to have required its food service workers, including servers, runners, bussers, and bartenders to share tips with tip ineligible employees, such as managers and silver polishers.   According to the lawsuit, brought by two servers who worked at the restaurant in 2015, when one of the servers asked his manager how much he had earned in tips on a particular night, he was referred to two different managers and never received an answer.

Attorneys for the workers also alleged that Bagatelle used a tip credit to pay its food service workers at the tipped minimum wage, despite failing to give them notice and requiring them to share tips with back of the house employees such as glass polishers and food expeditors.

The proposed settlement encompasses all servers, runners, bussers, and bartenders who worked at Bagatelle from January 1, 2012 to March 1, 2017.  It is estimated that the settlement will cover at least 100 workers and will be distributed in two categories: a. the amount of tips each worker received during his or her work period at Bagatelle, and b. a calculation based on total weeks worked.

Rosebud Restaurants to Pay $1.9 Million to Settle Lawsuit Claiming Discrimination Against African-Americans

Rosebud Restaurant EEOC discrimination

Rosebud Restaurants will pay $1.9 million to settle a discrimination lawsuit claiming that it refused to hire black employees.  According to the lawsuit filed by the U.S. Equal Employment Opportunity (EEOC), 13 Italian restaurants operated by Rosebud in Chicago and the surrounding suburbs refused to hire African-Americans because of their race. The EEOC also charged that managers, including Rosebud owner Alex Dana, used racial slurs to refer to blacks.   At the time EEOC began investigating Rosebud’s hiring practices, many of its restaurants had no African-American employees at all.

The settlement calls for Rosebud to pay $1.9 million to African-American applicants who were denied jobs.  Additionally, Rosebud has agreed to hiring goals for qualified black applicants, with the aim that 11% of Rosebud’s future workforce be African-American.  In addition, the settlement enjoins Rosebud from engaging in race discrimination or retaliation in the future. It also requires Rosebud to recruit African-American applicants, train employees and managers about race discrimination and retaliation, provide periodic reports to EEOC on compliance with the decree’s terms for four years, and post notices informing employees of the decree’s terms.

The restaurants covered by the suit include The Rosebud; Carmine’s; Rosebud on Rush; Rosebud Prime; Mama’s Boy; Rosebud Steakhouse; Rosebud Deerfield; Rosebud in Naperville; and the closed restaurants Rosebud Old World Italian; Rosebud Theatre District; Rosebud of Highland Park; Rosebud Burger & Comfort Foods; Rosebud Trattoria; Joe Fish; EATT; Bar Umbriago; and Centro.

An EEOC spokesman said, “African-Americans have faced and still face barriers in being hired at upscale restaurants, especially in visible, and often well-paid, positions such as server. That is why the recruiting and hiring relief in this decree is so important. It will lead directly to qualified blacks being hired for front- and back-of-the-house positions, helping to remedy past discrimination by Rosebud and ensuring equal employment opportunities for future African-American applicants.”

 

EEOC Sues Ruby Tuesday For Age Discrimination

Ruby Tuesday EEOC age discrimination

Ruby Tuesday, a national casual dining restaurant chain, violated federal law by refusing to hire a qualified applicant at its Boca Raton, Fla., location because of his age, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed in federal court in Florida.

According to the EEOC’s lawsuit, the restaurant declined to hire a qualified applicant with over 20 years of experience in the food and beverage industry for a general manager position at its Boca Raton restaurant. In response to an inquiry by the applicant as to why Ruby Tuesday declined to hire him, the company informed him it was seeking a candidate who could “maximize longevity.”  According to the lawsuit, the applicant was 59 when he applied for the job, and the individual who got the job was 17 years younger.  Attorneys for the EEOC contend that the failure to hire the applicant violated the Age Discrimination in Employment Act.

A spokesman for the EEOC said, “Age cannot be a factor in whether or not someone can earn a living.  The Age Discrimination in Employment Act was put in place precisely to protect people against this type of conduct. The bustling hospitality industry needs to be reflective of all of the members of our community.”

In 2013, Ruby Tuesday paid $575,000 to resolve another age discrimination lawsuit brought by the EEOC on behalf of older restaurant workers in Western Pennsylvania and Ohio.

Denny’s Restaurants Cheated Assistant Managers out of Overtime Wages According to New York lawsuit

Denny's overtime New York assistant managers

Denny’s restaurants paid Assistant Managers on a salary to avoid paying them overtime, according to a lawsuit filed in New York federal court. An Assistant Manager in Horseheads, New York alleges he worked 50 to 70 hours per week on average, but was not paid overtime compensation at time- and-a-half his regular hourly rate for all hours worked over 40 each week.  Instead, he says Denny’s paid Assistant Managers an annual salary regardless of the number of hours worked.

The lawsuit is directed at franchise FEAST American Diners LLC, which operates 17 Denny’s restaurants in New York.  Attorneys for the Assistant Manager claim that Assistant Managers at Denny’s had primary job duties that included preparing food, helping customers, bussing tables, cleaning the restaurant, labelling and rotating food product, and checking inventory.  The lawsuit alleges that the Assistant Managers did not exercise the responsibilities of a manager or use independent judgment and discretion in running the restaurants, as they did not hire, fire, discipline, or direct the work of other Denny’s employees.

The lawsuit claims that Denny’s restaurants did not provide labor budgets with enough money to cover all hours needed to complete the necessary manual labor tasks.  As a result, they contend Denny’s had knowledge that this underfunding led to Assistant Managers working more than 40 hours per week while mainly performing the overtime-eligible work tasks described above.  The lawsuit also alleges Denny’s failed to keep accurate time records, does not record all hours worked by Assistant Managers, and failed to post a notice explaining the minimum wage and overtime wage requirements anywhere in the restaurants.

This lawsuit continues a recent trend of restaurant workers alleging misclassification as Assistant Managers so they would be “exempt” from the FLSA requirement to receive overtime pay at time and a half for hours worked over forty in a workweek.  Other restaurants hit with lawsuits claiming Assistant Managers were paid a salary to avoid overtime pay include Cracker Barrel, Dunkin Donuts, Chipotle, Jack in the Box, and Jimmy John’s.

 

New York City’s Gramercy Tavern Will Pay $695,000 to Restaurant Workers for Wage Theft

Gramercy Tavern, the popular Danny Meyer-owned upscale eatery located in New York City’s Flatiron District has agreed to pay $695,000 to current and former restaurant workers for wage theft violations, including an allegedly illegal tip pool and failure to pay workers the minimum wage.  The lawsuit, brought by two former bussers, claims Gramercy Tavern engaged in unlawful tip pooling practices by requiring service employees, such as service staff, bussers, runners, captains, and other service workers to share their tips with non-service employees. According to the lawsuit, these non-service employees included expeditors, silverware polishers, wine managers, and other workers who did not regularly and customarily interact with customers.

The bussers had claimed Gramercy Tavern used a tip credit to pay its workers at the tipped minimum wage, despite retaining a portion of the tips shared by employees and requiring them to participate in the illegal tip pool with non-service employees.  Employers may not use a tip credit unless the service employees retain 100% of all tips and gratuities they receive.

The workers also alleged that Gramercy Tavern required clients to pay an automatic “service charge” of 20% of the total bill for private events, but that none of these gratuities were distributed to the event’s service workers, in violation of the New York Labor Law.

The settlement will be distributed to approximately 220 waiters, waitresses, captains, bussers, food runners, and coffee runners who worked at Gramercy Tavern at any time between June 23, 2011 and September 15, 2016.  The settlement was approved on May 17, 2017 by Judge James C. Francis, a federal judge in New York.

 

Sous Chef Lawsuit Claims Pay By Salary Unlawfully Denied Him Overtime Pay

kitchen overtime kona grill

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.

May 21st is National Waiters and Waitresses Day – Know Your Rights!

server restaurant image waiter tip credit

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:

  1. 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.
  2. 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).

  3. 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.

  4. 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.
  5. 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.

  6. 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.

  7. 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.

  8. Charging for Customer Walkouts 

    Servers should not be charged for customers who dine and dash.

  9. Breakage Charges 

    Servers do not have to pay for broken plates or glassware.

  10. Uniform MaintenanceWaitstaff should not be charged for buying or cleaning a uniform.

Gallagher’s Steakhouse in NYC Accused of “Blatantly Stealing” from Workers in Wage Theft Lawsuit

Gallaghers steakhouse wage theft lawsuit

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.

 

 

DISCLAIMER: The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. Please verify that you have read the disclaimer.

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form