Minimum Wage

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.

 

 

Philadelphia Restaurant and Market to Pay $660K for Overtime Violations

reading terminal market overtime issue

A produce market and a restaurant at Reading Terminal Market will pay $660,117 to settle overtime claims.  The settlement is for back wages and liquidated damages for 140 present and past workers to resolve violations of the federal Fair Labor Standards Act.

Department of Labor investigators found that Iovine Brothers Produce and Molly Malloy’s restaurant, which operates out of the Reading Terminal Market in Philadelphia, Pennsylvania, violated the overtime and recordkeeping provisions of the FLSA.  The investigation determined that the companies failed to pay overtime at time-and-a-half when employees at the produce market and restaurant worked more than 40 hours in a workweek.  Instead, the employer paid for the overtime hours at straight time rates, in cash.  The failure affected regular hourly employees, and tipped employees, such as servers and bartenders. The employer also failed to maintain some of the payroll records required by law. A civil money penalty of $62,007 was assessed due to the willful nature of the wage theft violations.

“For workers in the restaurant and service sectors, money earned through overtime can make a big difference to their livelihood,” said a Department of Labor spokesman. “For employers in this competitive industry, maintaining a level playing field is critical.  Our top priorities are to ensure that workers are aware of their rights, and to help companies come into compliance with the law.”

The federal FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour ($11.00 per hour for workplaces with more than 10 workers in New York City), for all hours worked, plus time-and-one-half their regular rates for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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.

Denny’s Restaurants Cheated Assistant Managers out of Overtime Wages According to New York lawsuit

Denny's overtime New York assistant managers

Denny’s restaurants paid Assistant Managers on a salary to avoid paying them overtime, according to a lawsuit filed in New York federal court. An Assistant Manager in Horseheads, New York alleges he worked 50 to 70 hours per week on average, but was not paid overtime compensation at time- and-a-half his regular hourly rate for all hours worked over 40 each week.  Instead, he says Denny’s paid Assistant Managers an annual salary regardless of the number of hours worked.

The lawsuit is directed at franchise FEAST American Diners LLC, which operates 17 Denny’s restaurants in New York.  Attorneys for the Assistant Manager claim that Assistant Managers at Denny’s had primary job duties that included preparing food, helping customers, bussing tables, cleaning the restaurant, labelling and rotating food product, and checking inventory.  The lawsuit alleges that the Assistant Managers did not exercise the responsibilities of a manager or use independent judgment and discretion in running the restaurants, as they did not hire, fire, discipline, or direct the work of other Denny’s employees.

The lawsuit claims that Denny’s restaurants did not provide labor budgets with enough money to cover all hours needed to complete the necessary manual labor tasks.  As a result, they contend Denny’s had knowledge that this underfunding led to Assistant Managers working more than 40 hours per week while mainly performing the overtime-eligible work tasks described above.  The lawsuit also alleges Denny’s failed to keep accurate time records, does not record all hours worked by Assistant Managers, and failed to post a notice explaining the minimum wage and overtime wage requirements anywhere in the restaurants.

This lawsuit continues a recent trend of restaurant workers alleging misclassification as Assistant Managers so they would be “exempt” from the FLSA requirement to receive overtime pay at time and a half for hours worked over forty in a workweek.  Other restaurants hit with lawsuits claiming Assistant Managers were paid a salary to avoid overtime pay include Cracker Barrel, Dunkin Donuts, Chipotle, Jack in the Box, and Jimmy John’s.

 

New York City’s Gramercy Tavern Will Pay $695,000 to Restaurant Workers for Wage Theft

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.

 

 

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