New York Law

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.

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

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.

 

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.

 

 

Baklava and Bread Makers Not Exempt from FLSA According to Brooklyn Judge

Gulluoglu Baklava & Cafe Baker overtime

A Turkish bakery’s attempts to exclude its bakery workers from the protections of the Fair Labor Standards Act (“FLSA”) was rejected by Magistrate Judge Ramon Reyes.  The workers in the lawsuit, filed by Pechman Law Group, made and served Turkish treats at Gulluoglu Baklava & Cafe locations in Brighton Beach and Astoria.  Gulluoglu is well-known throughout Turkey for its baked goods.  Although formally trained to make pastry and baklava, these bakers allege making little from scratch.  They baked bread, served coffee, and performed other non-skilled tasks, but most of their work consisted of adding finishing touches to reheated baklava and cakes imported from abroad.  Gulluoglu paid the bakers a fixed weekly salary, which the workers assert did not properly compensate hours worked over forty in a week.  The bakers sued to recover unpaid overtime pay, as well as spread-of-hours pay as required under New York Labor Law.

Gulluoglu attempted to have the case dismissed by arguing that the bakers were creative professionals and therefore exempt from the FLSA’s overtime provisions. The creative professionals exemption specifically requires that an employee’s primary duty involve “invention, imagination, originality or talent.”  In his Report to the district judge, Judge Reyes found that by reheating baklava and frosting pre-made cakes, the bakers did not use any of the creativity or originality envisioned by the exemption.  Applying it here, the judge said, would “extend it to virtually every chef save those who work with pre-made food.” Even assuming that the exemption applied because the chefs made bread from scratch, Judge Reyes found no evidence that bread-making was their primary duty.  Absent this evidence, the magistrate judge concluded that Gulluoglu had not proven any of their defenses.

Judge Reyes’s recommendation not to apply the exemption and allow the bakers to present their wage claims will be reviewed by the United States District Court Judge Dora L. Irizarry.

 

 

World-renowned Chef and Restauranteur David Bouley Sued for Tip Credit Wage Violations

Bouley front of restaurant minimum wage

A former restaurant worker at three of David Bouley’s New York City restaurants and event spaces claims the world-famous Bouley institutions failed to pay tipped restaurant employees minimum wage and overtime pay in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.

The worker, who was employed as a runner at Bouley Restaurant, Bouley Test Kitchen, and Bouley Botanical from June 2010 to September 2016, also alleges that the restaurants required workers to pay to clean and maintain their uniforms out of their own pockets, and failed to provide workers with a pay notice or accurate wage statements, in violation of the New York Labor Law.

In the collective and class action lawsuit, filed in federal court in the Southern District of New York, the runner asserts that the Bouley restaurants paid tipped employees, including captains, servers, front waiters, assistants, bussers, runners, and baristas at the tipped minimum wage, currently $7.50 in per hour in New York, while requiring them to share their tips with non-service employees.  Specifically, the runner claims the Bouley restaurants permitted expediters, who are back of house employees with little to no direct customer interaction, to participate in the tip pool.  He also says the restaurant never gave the tipped workers notice of its intent to use the tip credit provision.

According to the FLSA, employers can take a “tip credit” and pay tipped employees below the federal minimum wage.  The United States Department of Labor regulations provide, however, that a restaurant will not qualify for the “tip credit” when tipped employees share tips with non-tipped workers who do not customarily and regularly receive tips, or when tipped workers do not receive notice of an employer’s intent to claim the tip credit.

 

 

Tip Sharing and 80/20 Violations Will Cost Red Robin Restaurants in New York $900,000

red robin store front

New York State Red Robin Restaurants have agreed to pay $900,000 to current and former servers to settle claims for tip splitting violations and violating the 80/20 rule.

The Red Robin Restaurants required their servers to share tips with expediters, even though expediters had little to no direct interaction with customers. Expediters do not customarily and regularly receive tips.  The restaurants took a tip credit to pay the waitresses, waiters, and bussers a tipped minimum wage.  Under the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”), however, employers lose the privilege of paying workers a tipped minimum wage when they require tip sharing with workers who are not entitled to tips, such as expediters or other back of house workers.

The servers also allege they spent more than twenty percent of their shifts performing side work, including cleaning, preparing food, refilling condiments, and stocking and replenishing the bar and food stations.  Under the FLSA and NYLL, 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.

The $900,000 settlement was preliminarily approved by Gary R. Brown, a federal magistrate judge in New York.  The settlement includes all 16 Red Robin Restaurants located throughout New York State and covers 2,153 servers who worked at any New York Red Robin from January 20, 2010 to December 31, 2016.  A fairness hearing in the case is scheduled for June 2017.

The settlement fund will be distributed among current and former New York State Red Robin servers based on the number of tipped hours they worked during the period January 20, 2010 to December 31, 2016.  Red Robin settled a similar wage theft lawsuit with Pennsylvania restaurant workers in 2016 for $1.3 Million.

Jue Lan Club, Hamptons Hot Spot, Sued for Wage Theft

Jue Lan Restaurant Front

The Jue Lan Club, the trendy Hamptons restaurant, nightclub and art gallery that made headlines for offering a $27,000 bottle of Dom Perignon Rose*, cheated workers out of the minimum wage, overtime pay and tips according to a class action lawsuit filed in New York federal court.

Attorneys for the workers claim that the Jue Lan Club and Stratis Morfogen, its principal owner, failed to pay its servers overtime pay of one-and-one-half times their hourly rate for all weekly hours worked over forty, even though waiters worked 60+ hours a week.  The lawsuit further alleges that Jue Lan unlawfully required its waiters, bussers, and bartenders to give a portion of their tips to managers and back of the house staff, including dishwashers.

Restaurant workers in Long Island are reminded that beginning in 2017, their employers must pay them at least $10.00 per hour worked.  An exception to this rule exists for tipped food service employees in restaurants, such as bartenders, servers, and bussers, who can be paid $7.50 per hour as long as the restaurant gives them proper notice of the “tip credit” laws.  To do so, the restaurant must provide them with a written notice explaining, among other things, that tipped employees make at least $2.50 per hour in tips.  The notice must also state that if the tipped employees failed to make at least $2.50 in tips per hour worked in a workweek, the restaurant will pay them the difference between the amounts that they actually made in tips per hour and the required minimum of $2.50.  Moreover, all restaurant employees who work over forty hours per workweek must be paid one and one-half times their regularly hourly wage rates per hour worked over forty.  The minimum overtime wage rate in Long Island is $15.00.  Once again, tipped employees’ rates can be lower as long as the restaurant complied with the notice requirements explained above.  Tipped employees who work more than forty hours per workweek must be paid at least $12.50 per hour worked over forty.

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