Minimum Wage

Philadelphia Restaurants to Pay Employees Nearly $830,000 for Wage Violations

PHILADELPHIA RESTAURANTS TO PAY EMPLOYEES NEARLY $830,000 FOR WAGE VIOLATIONS

Two Philadelphia restaurants, Tierra Colombiana and Mixto, have agreed to pay 156 employees a total of $830,00 in back wages, liquidated damages and penalties to resolve federal wage theft violations.

An investigation conducted by the Wage and Hour Division of the United States Department of Labor (DOL) found that Tierra Colombiana and Mixto violated the overtime, recordkeeping and minimum wage provisions of the Fair Labor Standards Act (FLSA). Both restaurants are owned by Jorge Mosquera, and are operated by Jorge and Mercy Mosquera. “This resolution restores back wages rightfully earned by hard-working employees,” said a Department of Labor representative. “We encourage all employers to take advantage of the Department of Labor’s education and outreach efforts to help them understand their responsibilities and how to properly comply with the Fair Labor Standards Act.”

The Department of Labor found that servers, bartenders, barbacks, runners, hostesses, kitchen chefs, and dishwashers regularly worked more than 40 hours per week, but were allegedly paid overtime hours worked at a rate of their regular hourly pay instead of at time-and-a-half as the FLSA requires.  The Department of Labor claims that the restaurants also failed to maintain required records and made some illegal deductions from employee wages by taking “breakage fees” out from workers’ paychecks, which resulted in some restaurant workers being paid less than the federal minimum wage. “This enforcement action will ensure that workers are paid for all of the hours they worked, and will go a long way in leveling the playing field for employers in the restaurant industry,” commented another representative.

The restaurants have agreed to comply with the FLSA in the future and protect the workers’ rights, including paying the proper overtime premium. The FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour (note that New York has a higher minimum wage) for all hours worked, plus time-and-one-half their regular rates, including commissions, bonuses, and incentive pay, for hours worked beyond 40 per week.  Employers also must maintain accurate time and payroll records.

Busser Sues Mario Batali’s Restaurant for Minimum Wage and Overtime Pay Violations

Busser Sues Mario Batali’s Restaurant for Minimum Wage and Overtime Pay Violations

A former busser employed by Mario Batali’s Babbo Ristorante Enoteca is suing the restaurant to recover minimum and overtime wages, and tips unlawfully retained by the restaurant. According to Octavio Quinones, who worked at Babbo as a busboy  for almost two years, the restaurant willfully failed and refused to pay him at the correct minimum wage and overtime rate, did not provide him with a written wage notice detailing his rate and frequency of pay, and forced the waitstaff to share tips with management.

During his shifts as a busser, Quinones would spend one and a half hours performing side-work, such as cleaning floors and folding napkins. Quinones was paid at the tipped minimum wage for all of his shifts even though he spent more than 20% of his time performing non-tipped side-work. According to the lawsuit, Babbo failed to notify front of the house workers at the beginning of 2017 that the proper full minimum wage was $11 and that it intended to take a $3.50 tip credit. According to the wage theft lawsuit, when Quinones earned overtime pay, Babbo also incorrectly factored in a tip credit.

Restaurants must provide notice before claiming a tip credit towards an employee’s wages. Under the Fair Labor Standards Act and the New York Labor Law, if an employee works over 40 hours per week, that employee must receive overtime pay. Sharing of an employee’s tips with a restaurant manager is strictly prohibited under the law.

Mastro’s Restaurant Accused of Stealing from Tip Pool

tip pool

Tipped employees at Mastro’s Steakhouse in Chicago sued the restaurant in Illinois state court, claiming that the restaurant illegally retained a portion of the tip pool, and failed to pay its servers the correct minimum wage.

Former Mastro’s busser Jose Murata brought the class action in Illinois State Court against Mastro’s, accusing the restaurant of violating Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act when it kept part of the pool of tips shared by its front of the house employees.

Attorneys for the severs claim that “the net effect of defendant’s policies and practices is that defendant willfully failed to pay the full amount of compensation earned and due to plaintiff and all other similarly situated employees,” and that “defendant thus enjoyed ill-gained profits at the expense of its hourly employees, including its Tip Credit Employees and Tip Pool Employees.” The class action lawsuit alleges that “in exchange for said labor, defendant was obligated to plaintiff and each member of putative … class the full amount of wages they earned, including tips. Defendant’s practice of operating an illegal tip pool and its improper taking of the Tip Credit has resulted in defendant’s Tip Credit Employees not being paid the full amount of minimum wages owed to them.” The lawsuit, claims that the restaurant was not allowed to take a  tip credit because it failed to pay the proper amount of wages to its servers.

Restaurants cannot require servers to share their tips with non-service employees who do not customarily and regularly receive tips, such as dishwashers, cooks, chefs, janitors, and managers. Restaurants can require waiters to split their tips from customers with other front of the house employees who provide personal service to customers as a principal and regular part of their duties (such as bussers, bartenders, barbacks, food runners, captains who provide direct food service to customers, and hosts who greet and seat guests).

Dimora Ristorante Pays Waiter $60,000 in a Wage Violations Settlement

Dimmora Ristorante pays a Waiter $60,000 in a Wage Violations Settlement

Dimora Ristorante, an Italian restaurant in Norwood, New Jersey, has paid $60,000 to a former waiter to settle a wage violations lawsuit for unpaid minimum and overtime wages and tip theft.  The waiter argued that Dimora unlawfully required all front-of-the-house tipped employees, such as waiters and bussers, to pool their tips and share portions of them with two of the restaurants’ managers.

Under the FLSA, a restaurant can require front-of-the-house employees to pool and share their tips.  However, the restaurant violates the FLSA if managers participate in the tip pool.  Only non-managerial tipped employees can participate in the tip pool.  If a restaurant violates this rule, it loses the tip credit, which is the privilege of paying front-of-the-house tipped employees at a reduced hourly wage rate.  If this happens, the restaurant must pay back the tipped employees the tip credit, i.e., the difference between the full minimum wage rate and whatever reduced amount it paid them (which cannot be lower than $2.13 in New Jersey).

This is what the waiter argued against Dimora.  According to the waiter, Dimora required him to share portions of his tips with two managers who hired, fired, interviewed, directed the duties, and set the work schedules of tipped employees.  Because of this violation of the FLSA, the waiter claimed that the restaurant should not have paid him at the reduced wage rate of $2.90 per hour.  He argued that because Dimora violated the FLSA, it should have paid him the full minimum wage rate of $8.38 in effect in 2016 in New Jersey.  In other words, the waiter claimed he was owed the tip credit of $5.48 (i.e., the difference between $8.38 and $2.90) per hour worked up to 40 per workweek.  The waiter also claimed that the restaurant failed to pay him any wages at all for hours worked over forty per workweek.

The waiter was represented by Louis Pechman and Gianfranco Cuadra of Pechman Law Group PLLC.

TGI Friday’s Settles Wage Theft Case for $19.1 Million

TGI Friday's Wage theft lawsuit

A nationwide wage theft lawsuit against TGI Friday’s has been settled for $19.1 million according to a court filing by the workers’ attorneys in New York federal court. The settlement, which covers 28,000 restaurant workers, is a record amount for resolution of a wage theft lawsuit in the restaurant industry. This settlement is the latest example of fast casual restaurants across the United States paying out millions of dollars on wage theft cases.

The lawsuit alleged that TGI Friday’s failed to pay its tipped hourly food service workers the proper minimum wage, overtime pay, and misappropriated tips. Attorneys for the servers, bussers, runners, bartenders, barbacks and hosts, claimed that TGI Friday’s failed to satisfy the strict requirements under the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”) that would allow them to pay a reduced minimum wage rate to tipped employees. In particular, TGI Friday’s had a policy and practice that required tipped employees to spend over two hours and/or in excess of 20% of their work shift performing non-tip producing “side work.” Side work included, general cleaning of the restaurant, preparing food in bulk for customers, cutting produce, refilling condiments, and stocking and replenishing the bar and service areas. According to attorneys for the workers, this practice violated the “80/20 rule” and TGI Friday’s should have paid the tipped employees the full minimum wage rate, rather than reduced tipped minimum wage rate.

The front of the house workers also alleged that TGI Friday’s required them to perform “off the clock” work for which they were never compensated. “Off the clock” work consisted of requiring them to arrive at the restaurant one hour before customer service to perform side work, requiring them to punch in after they got their first table, and punch out before they performed closing side work. As a result of these practices, workers were not compensated for all the hours they worked and when they worked over forty hours per workweek, they were not paid overtime pay. Furthermore, the lawsuit claimed that TGI Friday’s required tips to be distributed to employees who are not entitled to tips under the FLSA and/or NYLL such as, silverware rollers and expeditors. Additionally, workers were given only one uniform, which TGI Friday’s failed to launder or pay workers the statutory uniform allowance. Finally, TGI Friday’s was accused of making unlawful deductions from employee wages for customer walkouts.

If approved, the settlement would resolve a nationwide class action brought by more than a dozen workers, alleging violations of the FLSA and claims brought under the labor or unfair competition laws of nine states: California, Colorado, Connecticut, Florida, Illinois, Maryland, Michigan, New Jersey and New York.

 

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.

 

 

 

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.

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.”

 

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.

New York City’s Pier A Banquet Hall Hit with Tip Sharing and 80/20 Violation Lawsuit

pier a banquet hall tip and 80/20 violations

Two former banquet servers at Pier A Harbor House banquet hall in New York City claim that Pier A unlawfully failed to pay its banquet servers and bartenders the minimum wage in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law.

The collective and class action lawsuit, filed in federal court in New York, alleges that Pier A paid its banquet servers and bartenders at the tipped minimum wage, currently $7.50 per hour in New York, while requiring them to share their tips with non-service employees.  The servers bringing the lawsuit claim that Pier A charged customers a “Service Fee” equal to 18% of the food and beverage costs of an event, and required its tipped workers to share a portion of this amount with porters.  Porters are back of house employees who provide little to no direct customer service, and are therefore not permitted to participate in tip splitting with front of house workers. Under the FLSA and New York Labor Law, employers lose the privilege of paying workers a tipped minimum wage when they require tip sharing with workers who are not entitled to tips, such as porters or other back of house workers.  The servers also say Pier A never gave its tipped workers notice of its intent to use the tip credit provision.

According to the lawsuit, Pier A also required banquet servers and bartenders to spend more than 20% of their workdays performing non-tipped side work.  For example, during typical banquet events that lasted four hours, Pier A required tipped workers to arrive 2 hours early to set up the dining room and to remain for about 2 hours after the event was over to disassemble to room.

Under the FLSA and New York Labor Law, employers are allowed to take a “tip credit” and pay servers, bussers, bartenders, and other front of the house workers below the federal minimum wage.  The United States Department of Labor regulations provide, however, that a restaurant will not qualify for the “tip credit” for workers that spend more than 20% of their time performing non-tipped work.

 

 

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