New York State

Happy National Waiters and Waitresses Day!


Today is National Waiters and Waitresses Day. To commemorate, check out this blog about the top ten wage violations in the restaurant industry written by founder Louis Pechman, featured on the Huffington Post.

Five Tips To Avoid Restaurant Pay Lawsuits


In handling over 100 restaurant pay lawsuits, I have seen common themes play out, whether that restaurant is a mom and pop take out place or a high end fine dining establishment. From the perspective of someone who has collected millions of dollars for restaurant workers across the United States, here are my top five tips to avoid wage theft lawsuits.

1. Tips Are the Property of Servers

From the management point of view, think of tips as kryptonite – stay away. It is not your money. Many of the lawsuits against restaurants arise from management dipping into gratuities left by customers for their servers. Tips are not house money. Owners need to make sure that tips are only shared with waiters, waitresses, bussers, runners, and other front of the house workers who deal with customers. And, managers need to stay out of the tip pool as well. The temptation to dip into the tips of servers – some of whom may be making a six-figure income – often times is irresistible for an owner. Taking 5% off of the pool, sharing tips with the kitchen, putting a manager in the tip pool, and having servers kick in cash every shift for a dishwasher to scrape plates, are all examples of skimming of tips that have resulted in lawsuits. Keep in mind that the penalties for skimming tips are severe, as the restaurant may have to disgorge the tips, lose the tip credit, and be subject to liquidated damages.

2. Paying Salary or Shift Pay = Lawsuits

Unfortunately, there is a common misconception that if you pay an employee on a salary, you don’t have to pay overtime. This can be a catastrophic mistake. The fact is that only a limited amount of employees in restaurants are “exempt” from the requirement of overtime under the federal Fair Labor Standards Act (FLSA) and the New York Labor Law. In order to qualify as an “exempt” job under these laws, a restaurant worker has to fit within the administrative, executive, or professional exemption. So, if you are paying your cook, maître’d, bookkeeper, host or other non-management employee a salary for a workweek in excess of 40 hours, you are unlawfully failing to pay them overtime — regardless of how much they are paid. Likewise, regardless of how much you pay an employee for shift pay, if that employee works more than 40 hours per week, the restaurant has broken the law by not paying him or her time and one-half for all hours worked over forty.

3. Keep Track of Work Hours

Restaurant pay lawsuits usually involve some sharply contested claim that employees are not paid for all hours worked. Do the kitchen workers take a break between lunch and dinner rush? Do waiters clean up for a half hour after they close out of the POS system? What is the start time, stop time, break time, lunch time? If a restaurant is not keeping track of hours worked by employees in either the front of the house or the back of the house, then it risks claims for unpaid hours. Both the FLSA and the New York Labor Law require employers to keep time and pay records of their employees. In this regard, it is important to note that in the Mt. Clemens case the Supreme Court held that where the employer keeps inadequate records, there is a presumption that the employee’s recollection of hours worked should be believed.

4. Know Your Restaurant Pay Math

Many restaurants get caught up in “gotcha” violations because they do not keep track of the specific wage rates for their workers. Here is a checklist for current restaurant pay requirements in New York

o Minimum Wage for non-tipped employees, including back of the house, is $8.75 per hour and $13.13 per hour for overtime hours.

o Tipped Minimum Wage for front of the house is $5.00 per hour and the tip credit is $3.75. The overtime rate for front of the house is $9.38 per hour. (You can only take the tip credit once).

o Tipped Minimum Wage for delivery workers is $5.65 and the tip credit is $3.10. The overtime rate for delivery workers making tipped minimum wage is $10.03 per hour.

o Uniform Maintenance for workers that work over 30 hours a week is $10.90; 20 -30 hours a week is $8.60; and less than 20 hours a week is $5.20.

o Meal Credits for front of the house and delivery workers is $2.50 and for back of the house workers is $3.00.

o Restaurants may deduct the cost of converting a tip left on a credit card to cash, but only may deduct the pro-rated share of the charge levied by the credit card company.

o All restaurant employees that work a spread of hours that exceed 10 hours on any day must receive an additional $8.75 in spread of hours pay.

5. Respect, Respect, Respect

A large portion of workers who sue their boss for wage pay violations visit an attorney because they believe they were the victims of an unlawful termination or wrongful discharge. Although that claim is generally DOA because employees in New York are “at will,” the inquiry leads to the follow-up question of “But how were you paid?” If that worker was paid incorrectly, and the employee believes he has been mistreated, a lawsuit will follow. However, there are many occasions where employees with excellent claims for back pay do not want to sue because the owner always treated them with respect and they believe they were paid fairly, albeit incorrectly. On the other hand we have seen lawsuits where some of the highest paid servers in New York have sued because they were treated disrespectfully, called names, and talked to in a demeaning manner. Restaurant owners in New York are right to believe they are under siege, but it is a misconception that every employee has a goal to bring a public lawsuit. Sometimes, treating employees with respect can make the difference in whether your cook or waiter has the word “plaintiff” before his name.



*These comments were prepared for the New York City Hospitality Alliance program on February 2, 2015, Have We Reached the Tipping Point for Tips?

New York State Minimum Wage Rises to $8.75

nys pic

Effective December 31, 2014, the New York State minimum wage rose to $8.75 per hour and the overtime rate for workers making the minimum wage rose to $13.13 per hour. This increase is the second in a series of three annual increases to the New York State minimum wage. The wage increased from $7.25 to $8.00 per hour on Dec. 31, 2013 and on December 31, 2015, it will increase to $9.00 per hour.

This hourly wage increase covers most hourly employees in New York State, including cooks, construction workers, and dishwashers. However, the minimum wage for tipped employees, like waiters, busboys, or bartenders, remains at $5.00 per hour, but the tip credit that an employer may take increased to $3.75 per hour. The overtime rate for tipped employees that work more than forty hours in a week is now $9.38 per hour.

Employers must also display an updated minimum wage information poster where workers can see it and must issue new pay notices to employees whose pay rate increased.

Sex Harassment Case Filed Against Johnny Utah’s Restaurant


Johnny Utah’s has been hit with a complaint alleging sexual harassment, as well as minimum wage and overtime violations, tip theft, and spread of hours violations of the New York Labor Law and Fair Labor Standards Act.

The Complaint, filed on behalf of eight waitress at against Johnny Utah’s Rockefeller Center location in New York federal court, alleges the Midtown restaurant, which is advertised as a “wild west party” and known for its mechanical bull, subjected its female servers to unwanted sexual conduct such as inappropriate touching, comments, and propositions. The lawsuit alleges that among other things, servers were expected to flirt with patrons, ride the bar’s mechanical bull shirtless, and kiss other female servers. The waitresses and bartenders were expected to take shots with and sit on the laps of male customers and were told to ignore any unwanted touching. Any employee who complained was assigned fewer shifts or was terminated.

Additionally, the lawsuit claims that the servers did not receive the minimum wage, overtime, and “spread of hours” pay they were lawfully entitled to receive. According to the lawsuit, employees regularly worked 60 to 70 hours per week but were only paid for 40 hours of work. Servers also were required to share their tips with managers and their tip money was often withheld to cover cash register shortages.

Lawyers for the workers are seeking to recover minimum wages, overtime compensation, spread-of-hours pay, misappropriated tips, uniform-related expenses, unlawful deductions, compensatory damages, liquidated damages, and attorneys’ fees.

Delivery Workers at Papa John’s Sue For $2 Million in Unpaid Wages



Five Papa John’s locations in New York have been accused of failing to pay its delivery workers the minimum wage, shaving hours from their pay, and requiring them to pay for bicycles and safety equipment used to do their jobs. The lawsuit brought by New York Attorney General Eric Schneiderman seeks to recover $2 million in damages for more than 400 delivery workers who were underpaid.

The lawsuit is the result of lengthy investigation by the Attorney General’s Labor Bureau that uncovered a multitude of wage violations by Papa Johns that included paying its delivery workers $5.00 an hour rather than the minimum wage of $7.25 at the time, shaving work hours by rounding down, improperly calculating overtime pay, requiring delivery workers to purchase bikes, helmets, locks, and chains at a cost of $500.00 a year, failing to pay spread of hours pay which is an additional hours of pay required when an employee worked more than 10 hours in a day, and not compensating for “call-in pay” which requires compensation for being called into work and then being sent home early.

In a press release on the filing of the lawsuit, Attorney General Schneiderman stated, “Nobody who works 40 hours a week should have to live in poverty.” He continued, “Like every other business in New York, fast-food employers must follow the law. My office will combat wage theft whenever and wherever we see it in order to protect the rights of hardworking New Yorkers, including pizza delivery workers and others who toil at fast-food restaurants.”

Restaurant Owner Arrested for Failure To Pay Minimum Wage And Overtime Pay


A New York owner has been arrested for failure to pay more than $35,000 in required minimum wage and overtime pay to five former employees, including cooks, cleaners, and cashiers. Elisa Parto, owner of restaurant Elisa’s Food & Plus, Inc. in Port Chester, NY, and Elisa’s Good & Plus, Inc. face multiple counts of Failure to Pay Wages under Labor Law Section 198-a(1), an unclassified misdemeanor. Elisa Parto faces a maximum jail term of one year, and both she and her company face maximum fines, in addition to restitution of $5,000 to her employees.

Ms. Parto opened her restaurant in 2010 and failed to pay the minimum wage and overtime pay to five employees who sometimes worked more than 70 hours a week between 2010 and 2014.

New York’s hourly minimum wage is $8.00 and New York and Federal Law require employers to pay time and a half when an employee works more than 40 hours a week. New York Labor Law also requires employers to pay wages no later than seven days after the end of the week when the wages were earned.

In a press release regarding the arrest, Schniederman stated that, “My office will take aggressive action, including criminal charges, where appropriate, against business owners who fail to properly compensate their employees for hours worked,” Attorney General Schneiderman said. “Protecting the livelihoods of hardworking New Yorkers is a priority for my office.”


Fig & Olive Restaurants Sued for Pay Violations

fig and olive

Fig & Olive restaurants have been sued by a former worker for failure to pay its waitstaff federal and state minimum wage for all hours worked, for instituting a tip scheme which was not determined nor agreed upon by the waitstaff, and for failure to provide proper wage statements informing the tipped employees of the amount of tip credit taken for each payment period.

On September 5, 2014, a former busboy of the restaurant’s New York City Fifth Avenue location filed a federal court lawsuit against Fig & Olive, a national chain of restaurants known for its specialty olive oils. The class action lawsuit was filed on behalf of waiters, busboys, runners, bartenders, and barbacks, alleging various violations against the restaurants’ seven locations across the United States. Among the various pay violations alleged, attorneys for the workers claim that the restaurants were not allowed to take a tip credit (which would allow the restaurants to pay a minimum wage at a rate less than the state and federal minimum wage) since the restaurants’ violations of the tip pool invalidated the tip credit. Attorneys for the waiter allege that the restaurant also violated the workers’ rights by failing to pay them for all hours worked through a policy of time-shaving, and failing to pay them call-in pay premium on days when they were sent home when they arrived at the beginning of the shift. Under the New York Labor Law, call-in pay must be paid to an employee who is reports for duty on any day, regardless of whether the employee is assigned actual work. The workers also claim that the restaurants failed to provide them with wage notices and wage statements as required by state and federal law. Lawyers for the workers are seeking unpaid wages, liquidated damages, and attorneys’ fees and costs.

Food Network Celebrity Willie Degel Agrees to Pay $900,000 to Settle Wage and Hour Lawsuit


Uncle Jack’s Steakhouse and its owner, Food Network Celebrity Willie Degel, will pay $900,000 to settle a wage theft lawsuit filed against its restaurants located in Bayside, Queens and Midtown, New York City.  Ironically, Degel was featured on Food Network’s Restaurant Stakeout, a show which followed Degel as he visited restaurants across the country with hidden cameras to capture their food service problems and attempted to fix them.

On May 22, 2014, Judge Loretta Preska, Chief United States District Court Judge in the Southern District of New York, approved a $900,000 settlement between the restaurants and its workers, who alleged that their worker rights were violated by the restaurant.  Approximately 239 restaurant workers who worked between September 2002 and September 2008 at the New York City and Queens restaurants are expected to benefit from the settlement.

The lawsuit, which was filed in 2008 by captains, waiters, runners, bussers, and bartenders, alleged that the restaurants failed to pay them at the legally required minimum wage, routinely shaved their hours when they worked over 40 hours and refused to pay them overtime wages for hours worked over 40, misappropriated gratuities belonging to the waitstaff, failed to pay spread of hours pay when the employees’ workdays exceeded ten hours, and refused to pay for employee uniforms or laundering of such uniforms.

TGI Friday’s Hit With Lawsuit For Tip Theft, Minimum Wage, and Other Labor Law Violations


TGI Friday’s was hit with a lawsuit by its servers for violations of state and federal wage payment laws.  According to the lawyers for the workers, which include current and former servers, bussers, runners, bartenders, barbacks, hosts, and other tipped workers, the restaurant chain faces a national class action lawsuit as a result of the alleged violations of workers’ rights.

The Complaint, which was filed in federal court by four former TGI Friday’s workers from the New York metro area, alleges that the restaurant required tipped workers to arrive at work before their scheduled start time and to stay at work after the restaurant closed without receiving the minimum wages and overtime to which they were entitled under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL).

In addition, the workers allege that the restaurant shaved hours from employee time records and allowed employees to work off-the-clock to perform side work such as cleaning the restaurant, preparing food in bulk for customers, cutting produce, refilling condiments, and stocking and replenishing the bar and service areas.

The lawsuit seeks to recover minimum wages, overtime compensation, spread-of-hours pay, misappropriated tips, uniform-related expenses, unlawful deductions, and other wages for current and former workers at TGI Friday’s restaurants throughout the nation owned and/or operated by Carrollton, Texas-based Carlson Restaurants Inc., Carlson Restaurants Worldwide Inc., and TGI Friday’s Inc. nationwide.

Oheka Castle Hit with Wage Theft Lawsuit

Oheka Castle

Oheka Castle, a catering facility for weddings and lavish events in Huntington, Long Island, has been hit with a wage theft class action by a former server and bartender.

According to the federal court Complaint filed by the attorneys for the workers, the catering facility (which was once the second largest residence in the United States) developed a fraudulent timekeeping scheme in order to avoid the payment of overtime premiums to their waitstaff.  When workers worked more than forty hours in a single workweek, they were required to carry over their hours to subsequent weeks, so that company records would not reflect that they worked more than forty hours in a given workweek.  In addition, the catering facility regularly required workers whose hours approached forty hours in a workweek to clock out of the company’s biometric timekeeping system and continue working.

Attorneys for the workers allege that the catering hall misappropriated tips belonging to servers and bartenders.  The Complaint alleges that owner Gary Melius personally confiscated cash tips left by patrons for other service staff.  Moreover, Oheka charges patrons of their restaurant and catering services, a “service charge” of up to 22% which is added to the bill, leading patrons to believe that the service charges would be paid to the service staff.  According to the lawsuit, however, Oheka violated the New York Labor Law because it did not remit any of those service charges to the service staff.

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