Wage and Hour

‘Essen Sued for Wage Violations

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‘Essen, a to-go café with locations in Midtown East, Hell’s Kitchen, and Financial District in New York City, has been hit with a wage violation lawsuit. The lawsuit alleges that the cafe failed to pay several cooks, food preparers and salad preparers minimum wage, overtime pay, and spread-of-hours pay. The lawsuit claims that these cooks, food preparers, and salad preparers would work between 48 to 78 hours a week, and would be paid fixed weakly salaries regardless of how many hours they worked. The employees also claim that they were forced to buy “tools of the trade” such as work uniforms out of their own pockets. Lastly, the lawsuit asserts that ‘Essen required employees to sign documents claiming they were paid properly in order to disguise the actual number of hours worked by employees.

For example, one employee claims worked approximately 78 hours a week and was paid a fixed weekly salary of $550.00. His hourly wage rate for those weeks was approximately $7.00, below the minimum wage. This employee also claims was asked to sign a document which he didn’t understand in order to receive his pay, and did not receive his pay when he failed to do so.

Reichenbach Hall Sued for Wage Violations

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A wage theft lawsuit has been filed against Reichenbach Hall, a German beer hall located in midtown Manhattan. The lawsuit charges that the restaurant cheated its waiters and waitresses out of minimum wage and overtime pay. The servers claim that Reichenbach Hall charged them for customer walkouts and for uniforms. The waitstaff also allege that Reichenbach Hall paid them the “tipped minimum wage” without giving prior notice and forced them to share their tips with managers and back of house employees as part of an unlawful tip pool.

 

 

Restaurant Workers Get 2017 Pay Hike

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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.

Brooklyn Diners Sued for Wage Theft

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Former waitstaff at the Del Rio Diner and Vegas Diner claim in a lawsuit that the diners failed to pay them minimum wage, overtime pay and spread-of-hours pay. According to the lawsuit, waitstaff at both diners, including servers, line cooks, dishwashers, food preparers and hostesses, worked anywhere in a range of approximately 48 to 66 hours per week without receiving the full minimum wage or any overtime compensation. Additionally, the waitstaff claim the diners failed to pay any spread-of-hours premiums despite some employees working up to twenty hours in a single workday.

The waitstaff allege that the diners paid them either a fixed weekly salary or an hourly rate, both of which resulted in rates under the minimum wage. For example, one of the waitstaff who worked as both a busser and server at the Del Rio Diner had his pay rate increase from $1.00 per hour to $2.50 per hour after working more than 20 years there. A server/hostess claims she was required to report that she made $5.00 per hour in tips regardless of how much she actually made so that after tax withholdings, her net wage payments were approximately $2.00 per hour.

Lawsuit Against Pizza Hut Restaurants Moves Forward

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A lawsuit against an operator of 1,260 Pizza Hut restaurants in twenty-eight states was given the green light by a federal court judge in Tennessee. The lawsuit claims that Pizza Hut restaurants operated by NPC International, Inc. violated the Fair Labor Standards Act by requiring servers to (1) undergo training and attend meetings while not clocked in; (2) perform “unrelated non-tip producing work” at “sub-minimum hourly wages”; (3) perform “side work” in excess of twenty percent of their time while clocked in as tipped employees at sub-minimum pay; and (4) falsely report tips they did not receive so as to reduce the amount of supplemental compensation the restaurant had to pay in order to meet the federal minimum wage.

The Pizza Hut workers allege that they were required to perform excessive side work while clocked in as tipped employees and that they worked off the clock, including attending monthly meetings and receiving mandatory training. Some workers claim they performed other duties, such as food preparation, customer service work, and cleaning while clocked in as tipped employees and that they were instructed to over-report tips to satisfy NPC’s tips credit requirement. These workers claim that, as a result of Pizza Hut’s goal of reducing labor costs, they were required to work off the clock, perform non-tipped work while clocked in as tipped employees, and over-report tips.

Judge Breen granted certification of a collective action and ordered that NPC produce the names of and send notice to all current and former tipped employees who were subjected to Pizza Hut’s alleged illegal policies at any time during the previous three years.

Upscale Long Island Restaurant Charged with Sexual Harassment and Retaliation

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Tom Schaudel, “Long Island’s homegrown restaurant king,” and his Jewel Restaurant have been hit with a complaint alleging sexual harassment and retaliation in violation of the New York State Human Rights Law, as well as minimum wage and overtime violations, tip theft, spread of hours violations, and uniform purchase and maintenance violations of the New York Labor Law and Fair Labor Standards Act.

A former server at the Melville, New York restaurant alleges that the Executive Chef sexually harassed her throughout her employment at Jewel, calling her inappropriate names, commenting on her body and appearance, and going out of his way to initiate unwanted physical contact. According to the lawsuit, the harassment reached the point of sexual assault in December 2015 when the chef “forcefully grabbed her by her hips, and aggressively thrusted his crotch against her backside.” The lawsuit contends that not only did management ignore the waitress’ complaints, but retaliated against and punished her for speaking out by taking her off the schedule for several weeks and instructing other employees not to ask her to cover their shifts. In February 2016, less than 2 months after the alleged assault, the server’s employment was terminated.

The lawsuit also claims that the waitress did not receive the minimum wage, overtime pay, spread of hours pay, and reimbursement for the purchase and cleaning/maintenance of her uniform. The server also contends that tip-ineligible employees, including managers, were in the tip pool in violation of the FLSA and New York Labor Law.

Attorneys for the waitress are seeking to recover compensatory damages, emotional distress damages, punitive damages, liquidated damages and attorney’s fees and costs.

California Labor Commissioner’s Restaurant Wage Theft Case Results in Landmark Criminal Conviction

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A San Diego restaurant wage theft investigation resulted in the owner’s conviction and sentencing to two years’ jail time for grand theft and labor violations. San Diego County Superior Court further requires the owner to repay $20,000 in stolen wages and tips to six of the restaurant workers.

Evidence presented revealed that Zihan Zhang, owner of Antique Thai Cuisine in San Diego, targeted immigrant workers who were promised wages but then often paid only in tips. Some of the kitchen staff was paid as little as $4 an hour and forced to work during breaks and meal periods. The owner further collected a portion of the tips from the unpaid workers, and charged them $5 a shift for “glass breakage” to offset her operating costs.

“Our investigation uncovered egregious wage theft and worker abuse – our collaboration with the San Diego District Attorney has resulted in the first criminal conviction of its kind in our state,” said Labor Commissioner Julie A. Su. ” California will continue to hold the line in ensuring that workers’ rights are protected.”

The Labor Commissioner’s Office referred the case in August 2014, and worked with the San Diego District Attorney’s Office to bring the case to trial. It is the first criminal jury trial conviction in California for felony grand wage theft by false pretenses.

Zhang was convicted of two felony counts of grand theft of labor for failing to pay workers as promised, one felony count of grand theft of tips and six misdemeanor charges, including two for refusing to pay wages when she had the ability to do so and four counts for failing to provide itemized wage statements

“With the Labor Commissioner’s assistance, we delivered justice for workers who were repeatedly abused by a dishonest employer,” said San Diego County District Attorney Bonnie Dumanis. “Prosecuting these types of cases helps ensure a level playing field for honest employers to fairly compete in the marketplace.”

The trial included testimony from one worker who worked 12 days in a row, including double shifts, and was not paid her hourly wage. Video footage showed the worker asking Zhang about payments she was owed when Zhang fired her. Zhang also charged another server for customers’ meals when they left before the food was served.

The wage theft came to light in 2014 after some of the workers filed wage claims with the Labor Commissioner’s Office. The Labor Commissioner’s Office cited Antique Thai $36,617 in July of 2014, including assessments of $14,567 for rest and meal period premiums, wages, overtime and liquidated damages, and civil penalties of $22,050 for failure to provide itemized wage statements as well as overtime, minimum wage, rest and meal period requirements.

Among its wide-ranging enforcement responsibilities, the Labor Commissioner’s Office inspects workplaces for wage and hour violations, adjudicates wage claims, investigates retaliation complaints, and educates the public on labor laws. Its Wage Theft is a Crime multilingual public awareness campaign helps inform workers of their rights and employers of their responsibilities. The Labor Commissioner’s Office, officially known as the Division of Labor Standards Enforcement, is a division of the Department of Industrial Relations (DIR).

Los Arcos Mexican Restaurant Underpaid $459,000 in Back Wages and Damages to Restaurant Workers

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Los Arcos Mexican Restaurant has agreed to pay a total of $459,130 to 28 employees for various Fair Labor Standards Act (“FLSA”) violations including unpaid overtime, minimum wage and recordkeeping provisions following a U.S. Department of Labor investigation. Los Arcos and its owner, Alberto Reyes, reached the agreement with the DOL after investigators found the restaurant paid cooks and dishwashers fixed salaries without regard to the number of hours they actually worked, which resulted in overtime violations when these employees worked more than 40 hours in a week without additional overtime payment as well as minimum wage violations when they worked so many hours that their salaries failed to cover $7.25 per hour. Additionally, the investigations found that Los Arcos required wait staff to work only for tips (resulting in minimum wage and overtime violations), reduced workers’ pay below minimum wage by charging employees for mandatory uniforms, and failed to maintain required time and payroll records.

The $459,130 settlement agreement includes $229,565 in back wages and an additional equal amount in liquidated damages for all affected employees who worked at either of the two restaurants.

A spokesman of the Department of Labor’s Columbia, South Carolina office stated, “The violations found in this case are all too common in the restaurant industry. These workers deserve to take home every penny they legally earned, and employers who play by the rules deserve a level playing field. The department will use every tool necessary to achieve compliance and to protect workers’ right – including the assessment of liquidated damages, and taking legal action when necessary.”

Long Island Restaurant to Pay $285K to Two Dozen Employees Denied Minimum Wage, Overtime Pay

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A Garden City restaurant and catering hall will pay a total of $285,800 in back wages and liquidated damages to 24 underpaid employees to resolve violations of the minimum wage, overtime and recordkeeping requirements of the Fair Labor Standards Act. The restaurant will also pay $24,200 in civil money penalties to the U.S. Department of Labor and take corrective action to prevent future violations as part of a consent judgment filed with the U.S. District Court for the Eastern District of New York.

An investigation by the department’s Wage and Hour Division found that Akbar Restaurant & Caterer on Long Island willfully failed to pay employees properly and maintain accurate records of wages and work hours between July 2012 and March 2016. Specific violations included:

  • Paying kitchen workers, dishwashers, and banquet workers who sometimes worked as many as 60 hours per week a fixed weekly amount regardless of the numbers of hours they actually worked, denying them overtime when they worked more than 40 hours.
  • Paying servers who sometimes worked as many as 70 hours per week less than the federal minimum wage of $7.25 per hour by failing to comply with the FLSA’s tip credit requirements.
  • Keeping multiple, incomplete, and inaccurate payroll records and providing investigators with falsified records.
  • Retaliating against an employee who refused to sign a false affidavit about defendants’ pay practices.

After withholding an employee’s paycheck because he refused to sign a false affidavit, the department obtained a temporary restraining order in July 2016, which enjoined the defendants from interrogating current and former employees about their communications with the government, and withholding wages from or terminating or threatening employees they believed cooperated with the division’s investigation. The court also ordered that the defendants permit department representatives to read a statement to the restaurant’s employees about their right to participate in the investigation.

“These employees work long hours at demanding jobs and deserve to be paid the wages they have rightfully earned. They also have the right to be free of intimidation by their employer,” said Irv Miljoner, director of the division’s Long Island District Office. “Employees have a legal right to participate in and cooperate with an investigation without fear of retaliation.”

“The Long Island restaurant industry should take note of the resolution of this case and the strong remedies obtained. Cheating workers of their wages not only harms them, it also puts at a competitive disadvantage those employers who obey the law in the first place. Intimidating or retaliating against employees is not only unacceptable behavior, it is illegal behavior. The department will not hesitate to pursue and secure appropriate and effective corrective action,” said Jeffrey S. Rogoff, the regional solicitor of labor in New York.

In addition to the payment of the back wages and liquidated damage, the consent judgment requires the defendants to use an automated timekeeping system for all of their employees, and post and provide employees with notices informing them of the resolution of the lawsuit and their FLSA rights in English, Spanish and Hindi.

 

 

ThunderCloud Subs Ordered to Pay Nearly $128k for Unpaid Minimum and Overtime Wages

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A U.S. Department of Labor investigation, determined that ThunderCloud Subs, stiffed its employees out of minimum wages and overtime compensation for all hours worked over 40 in a given workweek. ThunderCloud Subs is a restaurant chain operating 30 locations and combined employing approximately 480 workers. The investigation revealed the wage violations occurred throughout several locations in the Austin, Texas area. As a result, Cumulus Inc. paid $83,617 in back wages and damages to 324 Austin restaurant workers, while ThunderCloud Inc. paid $44,250 to 229 employees.

The Department of Labor investigation revealed that ThunderCloud Subs failed to pay employees for all the hours they worked, allowing employees to work off the clock but paying only for scheduled hours, not hours actually worked. Other violations include failing to pay employees time and one-half for overtime hours worked, failing to pay overtime to several managers who did not meet the requirements for any exemption from overtime, and failing to keep accurate records of weekly hours worked by nonexempt employees.

Betty Campbell, regional administrator for the Department of Labor stated, “Employers like ThunderCloud Subs have a responsibility to know and follow the law. The U.S. Department of Labor will continue to vigorously enforce the law, and educate employers to ensure proper wages are paid. Companies who violate the law must not gain a competitive advantage over employers that play by the rules.”

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