Wage and Hour

Uno Pizzeria Charged with Time-Shaving Scheme and Wage Theft

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A Queens’ Uno Pizzeria & Grill has been accused of wage theft by its waitstaff in a case filed in New York federal court. The lawsuit accuses the restaurant of violating the minimum wage requirement, overtime requirement, tip-credit notice requirement, and the 80/20 rule of the Fair Labor Standards Act and New York Labor Law.

According to the lawsuit, workers at the Astoria restaurant were required to punch out at the end of their scheduled shift, but had to work as much as two additional hours after punching out. Wage statements issued by the restaurant did not reflect the off-the-clock hours work.

The lawsuit also claims that Uno required its waitstaff to engage in non-tipped activities, such as moving heavy boxes, preparing food, wiping the restaurant walls, and cleaning the kitchen, for 20% or more of their workday. Attorneys for the waiters claim that because the waitstaff engaged in those non-tipped activities must be paid at the full minimum wage of $8.75, rather than the tipped minimum wage of $5 per hour, because of the violations of the 80/20 rule.



Four Papa John’s Franchisees in New York to Pay Workers $500,000 for Wage Theft

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Better ingredients, better pizza, but worse pay. Papa Johns forks over $500,000 for wage theft violations.

Attorney General Eric T. Schneiderman and the U.S. Department of Labor recently announced four settlements totaling nearly $500,000 with three current Papa John’s Pizza franchisees and one former franchisee, who together owned a total of nine restaurants in Queens, The Bronx, and Brooklyn. The franchisees investigated by the Attorney General and the U.S. Department of Labor’s Wage and Hour Division admitted to a number of labor violations, including minimum wage, overtime and other basic labor law protections. The employees underpaid by franchises announced in the settlements worked in several neighborhoods across Queens, as well as in neighborhoods in Brooklyn and The Bronx.
“These settlements and our successful partnership with the Attorney General’s office are a warning to employers who choose to violate state and federal wage laws that we do not tolerate such mistreatment of employees and will actively work together to pursue and obtain proper compensation for workers,” said Jeffrey S. Rogoff, the regional solicitor for the U.S. Department of Labor. Back wages and damages will be distributed to over 250 underpaid workers.
The agreements followed joint investigations into the franchisees, covering various time periods beginning as early as 2008. All investigated franchisees admitted to the violations of law outlined in the settlement agreements. The admitted violations included the following:
• Some stores failed to pay employees the minimum wage and overtime wages required under the federal Fair Labor Standards Act and state law.
• Some stores violated a state requirement that employers must pay an additional hour at minimum wage when employees’ daily shifts are longer than 10 hours.
• Some stores failed to provide adequate uniforms for employees for the number of shifts in a week, and also failed to pay the required uniform laundry allowance.
In addition to payment of $469,355 in back wages and liquidated damages, the franchisees which remain open must also institute complaint procedures, post a statement of employees’ rights, and designate an officer to submit quarterly reports to the Attorney General’s Office regarding ongoing compliance for three years, and one franchisee must also retain an independent monitor going forward.

Danny Meyer Shaking Up Restaurant Industry With No Tipping Policy


Danny Meyer, widely recognized as New York City’s lead restaurateur, has established a no tipping policy at his restaurants. Louis Pechman, founder of waiterpay.com, spoke to Eyewitness News ABC 7 about the effects of this policy change on restaurant workers.

Lawsuit Charges 17 Houlihan’s restaurants in New Jersey and New York With Wage Theft


Houlihan’s engaged in “pervasive skimming from employees’ tips and wages,” according to a federal court lawsuit charging the restaurants with violations of the minimum wage, overtime and record-keeping requirements of the Fair Labor Standards Act.

The wage theft lawsuit against Houlihan’s could recover millions in back wages, tips and liquidated damages on behalf of approximately 1,430 current and former Houlihan’s employees. The defendants include A.C.E. Restaurant Group Inc., A.C.E. Restaurant Group of New York LLC and Arnold Runestad. An investigation by the Department of Labor found that the defendants engaged in a number of practices that violated the FLSA. These include the following:

  • Requiring servers and bartenders to contribute a percentage of tips to a tip pool, but using the tips to pay employees for tasks, such as custodial and kitchen work. The lawsuit claims that Houlihan’s regularly retained a portion of employee tips.
  • Denying overtime pay to employees who worked at more than one restaurant, even when their combined hours totaled more than 40 hours in one workweek.
  • Having employees work off-the-clock, earning tips for their labor.
  • Routinely deducting money from employees’ paychecks for meals consumed during breaks, while also requiring payment, at times, for the meals. The deductions were greater than the defendants’ cost for providing the meals, and often resulted in some employees receiving less than minimum wage.

According to the Department of Labor, the severity of these violations and the number of affected workers is such that restitution, could amount to millions of dollars. Restaurant workers are among those in our economy who are most vulnerable to wage violations, and we are committed to pursuing remedies vigorously on their behalf whenever necessary. Houlihan’s practices deprived many of their employees of money rightfully earned — money that they need to afford basics. Reducing labor costs by shorting workers also places law-abiding restaurants at a competitive disadvantage, and violates the principle of a fair and level playing field laid out in the FLSA.

The New Jersey restaurants are located in Bayonne, Brick, Bridgewater, Cherry Hill, Eatontown, Fairfield, Hasbrouck Heights, Holmdel, Lawrenceville, Metuchen, New Brunswick, Paramus, Ramsey, Secaucus and Weehawken. The New York locations are in Farmingdale and Westbury.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.

The FLSA requires an employer of a tipped employee to pay no less than $2.13 an hour in direct wages ($5.00 in New York), provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour ($8.75 in New York). If an employee’s tips combined with the employer’s direct wages do not equal at least the minimum wage, the employer must make up the difference.

Tips are the property of the employee, and the employer is prohibited from using an employee’s tips for any reason other than as a credit against its minimum wage obligation to the employee (tip credit) or in furtherance of a valid tip pool among employees who customarily and regularly receive tips. A valid tip pool may not include employees who do not customarily and regularly receive tips (for example, dishwashers, cooks, chefs and janitors), and an employee cannot be required to turn over his tips to the employer. Employers also are required to maintain accurate time and payroll records.


Community Comments

Class Action Status Granted in Lawsuit Against Mallozzi’s Restaurants


The Albany Times-Union reported on the class action certification of a lawsuit filed by servers who worked at Mallozzi’s Restaurants in the Albany, New York area. The lawsuit alleges that Mallozzi’s charged banquet customers a mandatory “20% service personnel charge,” but while banquet customers reasonably believed this charge to be gratuity, Mallozzi’s retained the funds and did not distribute them to servers, who were paid at a flat hourly rate. In the Decision by Judge Richard Platkin, the Court found that class action status was warranted to address the claims that the restaurant’s retention of the service charge violated the New York Labor Law.

The attorneys for the restaurant workers are Louis Pechman, founder of waiterpay.com, along with Maimon Kirschenbaum. Over one hundred employees, who worked at Mallozzi’s since July of 2008, are covered by the class action.

Inclusion of Coffee Person in Tip Pool May Invalidate Tip Credit

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A tip out to a coffeeman who does not interact with customers may invalidate a restaurant tip pool according to a Decision by the Fifth Circuit Court of Appeals.

In a case against Tony’s Restaurant, a fine dining restaurant in Houston, a coffeeman received a fixed ten dollars from each station each shift. The servers at the restaurant sued, claiming that by requiring them to share tips with the coffeeman, who worked in the kitchen and did not serve customers, the restaurant violated the Fair Labor Standards Act, and was not entitled to take a tip credit.

The Court of Appeals explained the tip credit rule as follows: “A restaurant may not claim a tip credit unless all tips received by a tipped employee have been retained by the employee, except that this subsection should not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips. 29 U.S.C. § 203(m). Thus, the general rule is that an employer may not claim a tip credit unless a tipped employee is permitted to retain all of his tips. The statute provides a limited exception to this rule by permitting the pooling of tips among employees who customarily and regularly receive tips. If an employee is required to share tips with an employee who does not customarily and regularly receive tips, the employer may not legally take a tip credit.”

In this case, the Court held that a jury could find that the coffeeman did not customarily and regularly receive tips, and may therefore be ineligible to participate in the restaurant’s tip pool.

Famous New York Deli Sued for Time Shaving and Overtime Violations

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A former cook at Ben’s Kosher Deli, has sued the restaurant chain for wage theft in New York federal court.

The lawsuit was filed by Michael Palermo, who worked at the Greenvale, Long Island location of the restaurant. Palermo claims that he worked between 72-96 hours each week, 12-16 hours per day, six days per week. According to lawyers for Palermo, the deli only paid him forty hours per week, not paying the cook any wages, including his over time wages of time and one-half, for hours that he worked in excess of forty per week. Palermo claims that Thanksgiving week in 2012, he worked approximately 100 hours and was only paid for forty of those at his regular hourly rate of $26.44.

The lawsuit seeks to recover unpaid wages, overtime compensation, and compensation for not receiving wage notices and statements as required by the Fair Labor Standards Act and the New York Labor Law.


Popular Greek Restaurant in Astoria, Queens Sued for Wage Violations

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Waiters worked only for tips at Taverna Kyclades, according to a lawsuit filed in New York federal court. The wage theft lawsuit filed against the restaurant, often recommended as one of the best Greek restaurants in New York, seeks to recover minimum wages, overtime compensation, and spread-of-hours pay under the Fair Labor Standards Act and New York Labor Law.

The former servers claim that the restaurant failed to pay any wages to employees—they only received tips from customers and were never paid an hourly rate. Additionally, the employees worked double shifts, expanding more than 10 hours a day, without receiving spread-of- hours compensation, required by New York wage laws.



Lawsuit Against Le Perigord Reported on by Wall Street Journal

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An article in The Wall Street Journal reported on workers suing restaurants in wage disputes. The story reports that workers claiming they have been cheated out of wages are increasingly taking legal action against expensive eateries in Manhattan. Featured in the article is a lawsuit against Le Perigord, which was filed by Louis Pechman, waiterpay.com founder.

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