Tip Credit

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.

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.

 

 

Workers Accuse Connecticut Diner of Wage Theft

server restaurant image waiter tip credit

Hamden Town House Restaurant in Hamden, Connecticut has been sued for wage pay violations by workers, employed at the diner as dishwashers, busboys, prep cooks, and cooks. Attorneys for the workers claim the diner required the workers to work between 53 and 72 hours every week and paid them a salary which resulted in hourly pay rates as low as $3.14 per hour, well below the minimum wage. They also allege the diner never paid them any overtime premium for weekly hours worked over 40. The workers also claim they were not given rest breaks despite consistently working 11 or 12-hour shifts, and that they had to work as many as eight straight hours before they could take a lunch break.

According to the lawsuit, the Connecticut diner paid the workers in cash, without any receipts or use of a time keeping system. The workers claim they were required to sign a book each week that inaccurately listed their hours and pay. The owners consistently either reduced the number of hours they worked, or falsely recorded their pay as higher than it really was. If they refused to sign off on the information in the book, they were paid nothing at all. Also, according to one worker, the owners periodically deducted approximately twenty dollars from his pay without explanation.

Connecticut’s current minimum wage is $9.60 per hour. The tipped minimum wage is currently $6.38 per hour for tipped workers (or $8.23 per hour for bartenders). The Connecticut Department of Labor also requires employers to pay employees a rate of at least one and a half times their regular rate of pay for all hours worked over 40. Further, employers in Connecticut must keep accurate wage records for all employees. Tipped workers in Connecticut must also sign weekly tip credit statements confirming that they are aware of the tipped minimum wage regulations in Connecticut and that they received a sufficient amount of payment via tips to be eligible for the tip credit.

Pechman Law Group recently settled a wage payment case against Maine Fish Market in East Windsor, Connecticut for $750,000. In that case, the workers alleged that the restaurant failed to give its servers and bartenders tip credit statements as required by Connecticut law, required them to pay for breakages, customer walkouts, and uniforms, and took ten to fifteen percent of each servers’ tips on a daily basis to pay other employees’ wages.

 

 

 

 

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.

 

 

Opening A Restaurant in New York: Legal Issue Boot Camp

New York City Bar Association Logo

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.

Maine Fish Market to Pay $750,000 in Back Wage to Employees

Maine Fish Market Restaurante Logo

Maine Fish Market, a popular seafood restaurant in East Windsor, Connecticut, paid $750,000 in back wages to approximately 70 employees for unpaid wages and tip theft violations. The class action lawsuit alleged that Maine Fish Market neglected to pay the federal minimum wage to its servers and bartenders and failed to pay overtime wages to the restaurant’s kitchen workers. In addition, servers claim they were unlawfully required to pay for breakages, customer walkouts, and uniforms. The restaurant also took ten to fifteen percent of each servers’ tips on a daily basis and allegedly used this money to pay other employees’ wages. As per the Fair Labor Standards Act and the Connecticut Minimum Wage Act, employers are not entitled to any of the tips earned by servers.

The employees were represented by Louis Pechman and Laura Rodriguez of Pechman Law Group PLLC, as well as by William Madsen of Madsen, Prestley & Parenteau LLC.

Restaurant Workers Get 2017 Pay Hike

back of house cooks

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.

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