Wage and Hour

Jessica Biel’s Restaurant Hit with $430k Wage Theft Lawsuit

Au Fudge gratuities Jessica Biel

Au Fudge, an upscale Los Angeles restaurant owned by actress Jessica Biel, was hit with a wage theft lawsuit claiming the restaurant withheld over $430,000 in tips from staff during events.   Described by the Los Angeles Times as an “organic, kid-friendly restaurant,” Au Fudge serves fine food and drinks and offers creative spaces for children’s activities, as well as au pair services.  Biel and her business partners are sued by several former employees including a former server, server assistant, au pair, bartender, runner, host and event director for gratuities and rest and meal break pay.

Au Fudge frequently hosted private events for big companies including Amazon, Netflix, and Fox Studios where the event contracts included an automatic 22 percent gratuity.  In their lawsuit, the former employees claimed that whenever there was a private event at Au Fudge, the restaurant led customers to believe that the “gratuity” fee that they paid was a tip that would be distributed to the waitstaff.  According to the workers, Au Fudge unlawfully pocketed all the gratuity fees that customers paid, even though those amounts should have been given to the waitstaff as tips. The complaint also alleges that employees were not paid for rest and meal breaks under California Law.

Attorneys for the workers are seeking unpaid wages, tip disgorgement, liquidated damages, and attorneys’ fees.

 

 

 

Ruby Tuesday Restaurant in Times Square Sued by Bartender for Wage Theft

Ruby Tuesday Lawsuit Tips Hours Bartender

Ruby Tuesday’s Times Square location was sued for wage theft by a former bartender, Amanda Zarfos, who alleges that the restaurant failed to pay tipped employees for all hours worked and violated the so called 80/20 rule.

The lawsuit, filed in New York federal court, claims that during her employment at Ruby Tuesdays, servers and bartenders at Ruby Tuesday were improperly paid at the tipped minimum wage  rate for all hours worked even though they spent more than 20 percent of her shifts performing work that involved no customer interaction and did not generate tips.  For example, Zarfos was required to brew beverages, cut lemons, bake bread, help pack to-go orders, and wipe wood.  According to the Department of Labor’s Field Operations Handbook,

The FLSA permits the employer to take a tip credit for time spent in duties related to the tipped occupation of an employee, even though such duties, are not by themselves directed toward producing tips, provided such related duties are incidental to the regular duties of the tipped employees and are generally assigned to the tipped employee. For example, duties related to the tipped occupation may include a server who does preparatory or closing activities, rolls silverware and fills salt and pepper shakers while the restaurant is open, cleans and sets tables, makes coffee, and occasionally washes dishes or glasses.  However, where the facts indicate that tipped employees spend a substantial amount of time (in excess of 20 percent of the hours worked in the tipped occupation in the workweek) performing such related duties, no tip credit may be taken for the time spent in those duties. All related duties count toward the 20 percent tolerance.

Similarly, the New York Labor law has an analogous prohibition covering non-tipped work exceeding 20 percent of a shift.

Attorneys for the restaurant workers also claim that tipped employees were required to work off-the-clock without pay. The lawsuit claims that employees were not allowed to clock in despite the restaurant knowing and expecting them to start working.  Willful refusal to pay employees wages for off-the-clock work is a violation of the Fair Labor Standards Act and the New York Labor Law.

Indian Restaurant Ordered to Pay $1.4 million to Five Restaurant Workers for Wage Violations

Indus Valley wage violations

Indus Valley Restaurant, an Indian restaurant on the Upper West Side, has been ordered by a New York Judge to pay $1.4 million in back pay and damages to five former restaurant workers for wage violations.

Indus Valley, now closed, was accused by the workers of failing to pay minimum wage, overtime, and spread of hours pay as required by the Fair Labor Standards Act and New York Labor Law. The workers who sued the restaurant included two cooks, a food runner, a waiter, and a busboy. The workers, who regularly worked up to seventy-two hours per week, were each paid a fixed weekly salary, rather than an hourly wage. They did not receive overtime payment when they worked over forty hours in a workweek.  Three of the employees are also owed unpaid minimum wages.

The decision follows an inquest at which the employees gave sworn testimony about their weekly schedules and payments from Indus Valley.  The owners failed to appear and were held in default by the Court.  Indus Valley is ordered to pay $1,412,318.66 plus interest, for unpaid wages, liquidated and statutory damages. Laura Rodriguez, an associate at Pechman Law Group, was lead attorney on this case.

Rosa Mexicano Reaches $3.6 Million Settlement with Servers for Tip Violations and Overtime

rosa mexicano overtime pay lawsuit tip theft

Rosa Mexicano has agreed to pay $3.6 million to settle a nationwide class action lawsuit alleging that the upscale Mexican restaurant chain failed to pay its waitstaff minimum and overtime wages and misappropriated tips.  The settlement agreement covers an estimated 3,500 employees at twelve locations in New York, New Jersey, Los Angeles, San Francisco, Miami, Boston, Atlanta, Washington D.C., Baltimore, and Minneapolis.

The restaurant workers filed the lawsuit suit in New York federal court in July of 2016, arguing Rosa Mexicano claimed an invalid tip credit and improperly paid their waitstaff at a tipped minimum wage instead of the full minimum wage. The waitstaff claims in their lawsuit that Rosa Mexicano did not inform them they would be paid at tipped minimum wage and misappropriated their tips, violating the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”). Tips were shared with “floaters”, who conducted miscellaneous tasks around the restaurant without ever having customer contact. According to the lawsuit, these “floaters” were not entitled to sharing in a tip pool, invalidating Rosa Mexicano’s tip credit.  The wage theft lawsuit also claimed that Rosa Mexicano did not pay waitstaff for hours worked over forty per week. Some former servers claimed to work up to 50 hours per week without receiving overtime pay. The lawsuit also alleges that waitresses, waiters, bussers, and bartenders did not receive “call-in pay” required under NYLL, when they reported for work only to be sent home before being able to work three hours. One of the former workers claims this happened on 146 shifts.  For these violations, the employees sought to recover unpaid minimum wages, unpaid overtime wages, unpaid “call-in pay”, liquidated damages and attorneys’ fees.

The attorneys for the restaurant workers are Fitapelli & Schaffer, a New York law firm. The settlement is subject to approval by United States Magistrate Judge Ronald L. Ellis.

 

 

Maroni Restaurant Settles Cook’s Overtime Pay Lawsuit for $110k

Maroni overtime pay lawsuit

Renowned Long Island restaurant, Maroni Cuisine, has agreed to pay $110,000 to settle a lawsuit alleging that the restaurant did not pay a cook overtime pay, in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”).  Maroni, notable for its exceptional meatballs, was voted the second best restaurant on Long Island by Zagat, and was also featured on “Throwdown with Bobby Flay.”

The cook who brought the lawsuit alleged that he was required to work approximately fifty-two hours per week, and was misclassified as an exempt employee and paid a weekly salary contrary to the Fair Labor Standards Act and the New York Labor Law.  The FLSA and NYLL provide that only employees who fit within the administrative, executive, or professional exemption qualify as exempt from the overtime laws, and all other employees must be paid overtime pay for hours worked over forty.

Vivianna Morales, an attorney with Pechman Law Group, was the lead attorney on behalf of the worker at Maroni.

Sonic Drive In Gets Department of Labor Help to Stop Wage Theft

sonic drive in wage theft

The U.S. Department of Labor and Sonic Drive In, the nation’s largest drive-in restaurant chain have signed a voluntary agreement to help Sonic’s 3,000+ drive in franchise locations comply with federal labor laws. Sonic has been one of a number of fast food restaurants that have been hit with wage theft lawsuits complaining that workers have had their time shaved, did not get overtime after 40 hours, and were required to work “off the clock.”

The Department of Labor announced, “We encourage other franchisors to follow Sonic’s example and take similar steps to benefit their franchises’ employees and owners by complying with the law… Abiding by the law makes better business sense than facing the prospect of paying back wages, damages, and penalties for violations of the Fair Labor Standards Act.”

The Department of Labor will provide easy-to-use compliance assistance tools designed for the franchise restaurant industry. The package will include video and online training, educational articles for use in internal company publications, and sample training materials for use in company staff meetings. The Department of Labor will also make representatives available to provide training and labor law compliance assistance to Sonic franchisees.

The Fair Labor Standards Act requires that fast food workers be paid at least the federal minimum wage of $7.25 per hour (note that New York has a higher minimum wage) as well as time-and-one-half their regular rates for every hour they work beyond 40 per week. Fast food restaurants and many chain restaurants have been sued recently for violating workers’ rights by failing to pay overtime and by forcing employees to work “off the clock.”

 

Department of Labor Rescinds Tip Pooling Rule

tip tip pooling tip theft

The United States Department of Labor announced that it will revoke an Obama-era regulation prohibiting restaurants from pooling customers tips with back-of-the-house workers.  Although this change could have a significant impact in many areas of the country, New York State still has restrictions on who can participate in a tip pool.

The Legal History

Unless state laws require higher amounts, as is the case in New York State, the Fair Labor Standards Act (“FLSA”), a federal law, requires employers to pay employees at least the federal minimum wage rate of $7.25 per hour worked.  The FLSA allows restaurants to pay employees who regularly receive tips as little as $2.13 per hour if they make the difference (i.e., $5.12) per hour in tips.  The $5.12 difference is known as a “tip credit,” which is a privilege that the FLSA gives to restaurants.  The FLSA also allows restaurants to require tip-receiving employees to pool their tips for distribution among employees.

Before 2011, there was much debate about which employees could participate in a restaurant’s mandatory tip pool.  Some courts concluded that only employees who regularly receive tips and who spend at least 80% of their time serving customers at tables, known as “food service employees,” could participate in a tip pool.  These courts concluded that if a restaurant forced food service employees to share their tips with non-service employees, such as cooks or other back-of-the-house employees, then the restaurant violated the FLSA and had to pay back tips and other wages to the food service employees.  Other courts reached the opposite conclusion.  They reasoned that any employee should be allowed to participate in the mandatory tip pool as long as the restaurant did not take a tip credit and, instead, paid its employees the full minimum wage rate ($7.25 under federal law, but higher under New York State law).

In 2011, the US Department of Labor enacted a regulation that back-of-the-house employees cannot participate in a tip pool with front-of-the-house food service employees regardless of whether the restaurant takes a tip credit. The 2011 regulation mirrors the New York Labor Law and the New York State Department of Labor’s Hospitality Wage Order, which limit tip pooling to food service employees only.  In New York, back-of-the-house employees can never participate in a mandatory tip pool with front-of-the-house food service employees.

The Recent Change and Effect in New York

Under the Trump Administration, the US Department of Labor has announced that it will revoke the 2011 regulation.  The effect of this revocation is that in many areas of the country, but not in New York, restaurants that do not take a tip credit can require front-of-the-house employees to share their tips with any other restaurant employee.  Note that, restaurants that take a tip credit against front-of-the-house food service employees still cannot require them to share their tips with back-of-the-house workers.

These changes at the federal level have no impact in New York, whose laws and regulations already require that tips left by customers be given to front-of-the-house employees.  Under New York laws, food service employees can be required to share their tips only with other food service employees.   For example, a tip pool in a New York restaurant is lawful if it is composed of non-managerial bartenders, servers, bussers, and runners.  However, it would be unlawful for a New York restaurant to require servers and bartenders to share tips with a cook or manager.

“Best Restaurant in America” To Pay $2 million to Settle Tip Theft Lawsuit

Blue HIll tip theft lawsuit

Dan Barber’s Blue Hill restaurant has agreed to pay its waitstaff $2 million to settle an unpaid wages and tip theft  lawsuit.

Recognized by Eater as the Best Restaurant in America for its locally-sourced farm-to-table cuisine, Blue Hill at Stone Barn and its sister restaurant in Manhattan was sued by two former servers in 2016 on behalf of themselves and all servers, bussers, bartenders, runners, and hosts and hostesses.  In their lawsuit, the servers claimed that Blue Hill required them to share their tips with expeditors, who were kitchen employees that did not interact with the restaurant’s customers.  The servers argued that this tip pooling system was unlawful.  Under the law, waitstaff should not be required to share their tips with restaurant employees who do not interact with customers, such as kitchen employees.

Attorneys for the workers also claimed that whenever there was a private event or banquet at Blue Hill, the restaurant led customers to believe that the “service” or “administrative” fee that they paid was a tip that would be distributed to the waitstaff.  According to the servers, Blue Hill unlawfully pocketed all service charges that customers paid, even though those amounts should have been given to the waitstaff as tips.

The wage theft lawsuit claimed that Blue Hill did not pay them minimum wages, as required under New York State law.  Because Blue Hill required the waitstaff to share tips with kitchen employees, like expeditors, in an unlawful tip pool, the restaurant could not pay waitstaff at a reduced minimum wage rate and take a tip credit.  Normally, if a restaurant meets several legal requirements, it may pay employees who regularly receive tips at a reduced hourly wage rate.  The restaurant loses this privilege if it pockets any part of the waitstaff’s tips or creates an unlawful tip pool.  For this reason, the servers claimed that they were owed the difference between the reduced hourly rates they were paid and the full minimum wage rates in New York.

Since the settlement, Blue Hill has eliminated tipping at its restaurants, a growing trend among New York restaurants.

 

Buca di Beppo Cheated Workers Out of Wages, According to Wage Theft Lawsuit

Buca di Beppo wage theft

A wage theft lawsuit claims the Times Square location of Buca di Beppo, a nationwide Italian restaurant, failed to pay its workers minimum wages and overtime pay in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.  According to a former server, Buca di Beppo maintained a policy of cheating its servers, bussers, and bartenders out of their wages by requiring them to clock out and continue working unpaid and off the clock, as well as refusing to pay them spread of hours pay when the length of their workday exceeded 10 hours.

According to the former server, Buca di Beppo required him to record his time using the restaurant’s point-of-service system, but did not allow him to accurately keep track of his hours.  He alleges that whenever he worked a double shift, Buca di Beppo required him to clock out for 30 minutes between shifts, even though he continued to work at the restaurant during that time.  When working the double shifts, the server claims his workday exceeded 10 hours, yet he never received spread of hours pay of an additional hour of pay at the minimum wage rate.

The class action lawsuit states that the server regularly worked more than 40 hours per week, yet whenever he worked more than 28 hours in a week, the restaurant would roll back and adjust his hours worked by reducing the hours on his time records.  It’s further claimed that Buca di Beppo shaved time by requiring the server to arrive at work two hours before the start of his shift to perform unpaid, off-the-clock work.

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