The New York City Bar Association will hold the CLE program “Opening A Restaurant in New York: Legal Issue Boot Camp” on March 24. The program will focus on the corporate, real estate, liquor license, and labor/employment issues involved in opening a restaurant in New York City. Speakers on the panel include Jack Gordon, partner at Kent, Beatty & Gordon LLP; Carolyn Richmond, partner at Fox Rothschild LLP; Sonal Shah, General Counsel of Ark Restaurant Group; Alex Victor, partner at Davidoff, Hutcher & Citron LLP; and Larry A. Welch, Associate at Golenbock Eiseman Assor Bell & Peskoe LLP. Lou Pechman will be chairing the event. For more information on the program please visit the event page.
Golden Corral restaurants throughout the United States misclassified “Kitchen Associate Managers,” and “Hospitality Managers,” as employees exempt from overtime, failing to pay them any overtime wages for hours they worked over forty in a given workweek. According to the restaurant workers, Golden Corral refused to pay them overtime in spite of the fact that they spent the majority of their time performing the same duties that non-exempt restaurant employees performed, including cooking and preparing food, taking out trash, washing dishware and glassware, refilling food on the buffet line, unpacking products and supplies, cleaning the restaurant, and serving customers. The lawsuit claims that Golden Corral applied the same compensation and employment policies to Assistant Managers at 94 restaurants across the country.
The workers also claim that Golden Corral willfully misclassified them as exempt workers ineligible for overtime pay, and was aware that Associate Managers across the country worked more than 40 hours a week without overtime compensation. The lawsuit alleges that Golden Corral failed to record all of the time that its employees worked and purposefully did not require workers to clock in or out or otherwise record their time in any way. Further, the Assistant Managers’ work hours were not recorded on their paystubs.
On December 31, 2016, restaurant workers throughout New York State will begin to see changes in the payment structure of their wages.
Back of the House Workers
Back of the house workers (cooks, dishwashers, stockers, and others without direct customer contact) will receive an increase from the current minimum wage rate of $9.00/hour beginning December 31, 2016, according to the following specifications:
|New York City – Large Employers (with 11 or more employees):||$11.00|
|New York City – Small Employers (with 10 or fewer employees):||$10.50|
|Long Island & Westchester:||$10.00|
|Remainder of New York State:||$9.70|
Front of the House Workers
New York State law allows employers in all industries, except building service and fast food, to satisfy payment of the minimum wage by combining a “cash wage” paid by the employer with a credit or allowance for tips that the employee receives from customers. For example, employers in the Hospitality Industry could satisfy the 2016 minimum wage of $9.00 by combining a cash wage of at least $7.50 with a tip allowance of no less than $1.50 per hour. Employers need only pay a cash wage of $7.50/hour to workers, so long as the employees receive at least $1.50/hour from customers in tips.
Beginning on December 31, 2016, tipped front of the house restaurant workers (servers, bussers, bartenders, hosts, hostesses, and others with direct customer contact) will still be required to receive the same 2016 minimum hourly wage rate of $7.50/hour from their employers. However, as of December 31, 2016, tipped restaurant workers must receive at least the following amount in tips per hour in order for employers to use the tip credit:
|New York City – Large Employers (with 11 or more employees):||$3.50|
|New York City – Small Employers (with 10 or fewer employees):||$3.00|
|Long Island & Westchester:||$2.50|
|Remainder of New York State:||$2.20|
Fast Food Workers
Additionally, restaurant workers in the fast food industry will see an increase in hourly wage rates. Employees who qualify for this increase include any person working at a fast food establishment whose job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.
On December 31, 2016, the minimum hourly wage rates for all fast food workers will increase according to the following specifications:
|New York City:||$12.00|
|Rest of the State:||$10.75|
For more information about your rights as a restaurant worker, take a look at our Top 10 Restaurant Pay Violations.
Jack in the Box has misclassified its store managers as overtime ineligible in order to cut its overtime pay obligations, according to a lawsuit filed in California federal court. The lawsuit claims that Jack in the Box, through a central business policy, requires its store managers to cover many work tasks of their subordinate employees. These assignments include working the drive-thru and the fryer, preparing food, cleaning up, and unloading products, as well as other like jobs. The store managers claim that despite performing these overtime pay eligible tasks, Jack in the Box mischaracterized them as ineligible for OT pay and has not paid them what they are owed. The lawsuit alleges that as result of this system, store managers were also regularly prevented from taking meal and rest breaks because they were assigned too much work and given no relief.
Jack in the Box allegedly paid its store managers a fixed salary amount that ultimately ended up being less than the minimum wage. Further, the store managers claim they were denied overtime pay although they “regularly” worked more than eight hours in a day or 40 hours in a workweek. They also claim that Jack in the Box did not reimburse them expenses for necessary travel costs in moving products between restaurants, and that they are not paid their fully owed wages upon the termination of their employment.
Former assistant managers at Ruby Tuesday restaurants filed a lawsuit claiming that the restaurant chain purposefully misclassified Kitchen Managers, Culinary Managers, Guest Services Managers, Front-of-House Managers, and Back-of-the-House Managers as exempt employees to avoid paying them overtime required by the Fair Labor Standard Act (FLSA).
Although the assistant managers primarily performed tasks similar to those performed by non-exempt employees, such as preparing food, serving customers, and cleaning the restaurant, Ruby Tuesday classified them as “executives” to exempt them from overtime requirements under federal and state laws.
In the lawsuit filed by the restaurant workers’ attorneys in Connecticut federal court, it is claimed that Ruby Tuesday did not pay their assistant managers premium overtime compensation when they worked beyond forty hours in a workweek. Assistant managers were consistently required to work more than forty hours per week and were earning as little as $37,500 per year. The two assistant managers that brought the lawsuit claim that they worked between fifty-five and sixty-two hours per week.
Lawyers for the workers also claim that their rights were violated because Ruby Tuesday was not keeping accurate time records for employee work hours. The assistant managers were not required to clock in or out, or otherwise record their time; neither was their work hours recorded on paystubs.
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 waiterpay.com founder Louis Pechman, featured on the Huffington Post.
Workers and assistant managers were not paid for all the hours they worked at Captain D’s Seafood Restaurant in Nashville, Tennessee, according to the lawsuit filed in Tennessee federal court on October 8, 2014. The Complaint alleges that employees regularly worked off the clock and during their unpaid meal breaks. Captain D’s also failed to pay employees one and one-half times their regular hourly rate for all hours worked over forty per week, in violation of the Fair Labor Standards Act (“FLSA”) and the Tennessee common law. Attorneys for the restaurant workers are seeking damages for unpaid wages, liquidated damages, attorneys’ fees and costs, and other damages.
Managers of Papa Gino’s, an Italian restaurant chain found throughout Massachusetts and New England, have sued for overtime and breach of contract. The named plaintiffs of the class action lawsuit, filed in the District Court of Massachusetts, held the titles of assistant manager, manager in training, and general manager throughout their employment by defendants. Though the plaintiffs had managerial titles they almost exclusively performed non-exempt, non-managerial work that hourly employees also performed. Their duties consisted of answering the phone, taking and preparing food orders, working at the grill and cash register, and cleaning.
The lawsuit alleges that defendants did not pay plaintiffs or other similarly situated “managers” for any hours worked in excess of forty each week, and that the restaurant shaved their hours. Their paystubs, for example, indicated forty hours of work per week, regardless of the number of hours actually worked. The workers claim that they were misclassified as managers, and they should have been paid overtime because.
Attorneys for the workers claim that the defendants violated the Fair Labor Standards Act (FLSA), Massachusetts Overtime Law, and Massachusetts common law. The employees are seeking back pay, liquidated damages, and attorneys’ fee as a result of Papa Gino’s alleged unlawful pay practices.
An associate manager for a Cracker Barrel restaurant has filed a class action lawsuit claiming overtime violations under the Fair Labor Standards Act and New York Labor Law. The Complaint, which was filed in federal court in the Northern District of New York, alleges that the restaurant chain failed to pay its associate managers overtime for hours worked over 40 per week and that the associate managers were required to use their personal cars to travel between the stores to pick up supplies without reimbursement for gas.
Lawyers for the associate managers claim that they were paid a salary and are entitled to overtime pay because the associate managers did not have authority to assign work or fire/hire employees, instead their duties include running cash registers, seating customers, bussing tables, waiting tables, working on the cooking line, preparing side dishes, and helping deliver meals.
The lawsuit seeks to recover unpaid overtime pay and unlawful deductions for current and former associate managers at Cracker Barrel restaurants throughout the nation.
The tip splitting policy of Starbucks coffee shops in New York was reviewed by the New York Court of Appeals in a decision that was issued yesterday.
In the Starbucks case, the New York Court of Appeals explained that employer-mandated tip splitting should be limited to employees who, like waiters and busboys, are ordinarily engaged in personal customer service, a rule that comports with the “expectations of the reasonable customer.”
The Court held that “an employee whose personal service to patrons is a principal or regular part of his or her duties may participate in an employer-mandated tip allocation arrangement under Labor Law § 196-d, even if that employee possesses limited supervisory responsibilities. But an employee granted meaningful authority or control over subordinates can no longer be considered similar to waiters and busboys within the meaning of section 196-d and, consequently, is not eligible to participate in a tip pool.”
Attorneys for workers and restaurants should take careful note of this decision as it is the best explanation of the law to date by a court on the important issue of managers participating in a restaurant tip pool.