Time Shaving

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.


Opening A Restaurant in New York: Legal Issue Boot Camp

New York City Bar Association Logo

The New York City Bar Association will hold the CLE program “Opening A Restaurant in New York: Legal Issue Boot Camp” on March 24. The program will focus on the corporate, real estate, liquor license, and labor/employment issues involved in opening a restaurant in New York City. Speakers on the panel include Jack Gordon, partner at Kent, Beatty & Gordon LLP; Carolyn Richmond, partner at Fox Rothschild LLP; Sonal Shah, General Counsel of Ark Restaurant Group; Alex Victor, partner at Davidoff, Hutcher & Citron LLP; and Larry A. Welch, Associate at Golenbock Eiseman Assor Bell & Peskoe LLP.  Lou Pechman will be chairing the event. For more information on the program please visit the event page.

Happy National Waiters and Waitresses Day!

old school waiter photo

Today is National Waiters and Waitresses Day. To commemorate, check out this blog about the top ten wage violations in the restaurant industry written by waiterpay.com founder Louis Pechman, featured on the Huffington Post.

Celebrity Chef Todd English Sued For Time-Shaving

Olives logo

A lawsuit claiming that restaurant employees were forced to comply with time-shaving practices that shorted them of their full earned wages and overtime compensation has been filed against celebrity chef Todd English and his Union Square restaurant, Olive’s New York.

The lawsuit, filed in Manhattan federal court, claims that dishwashers at Olive’s New York were asked put on their uniforms early before clocking in and to clock out before changing out of their uniform.  As a result, employees worked over 40 hours per week, without getting overtime pay as required by federal and state law. Attorneys for the restaurant workers seek to recover unpaid compensation and liquidated damages.

Hooters Workers Sue for Wage Theft

Hooters Logo 2010

Waitresses and bartenders at a Hooters Restaurant in Alabama filed a lawsuit in federal court alleging that Hooters violated the minimum wage provisions of the Fair Labor Standards Act (FLSA) when it paid employees a reduced tipped minimum wage of $2.13 per hour, rather than the FLSA minimum wage of $7.25. The Complaint alleges that the restaurant should not have taken a tip credit because it allowed kitchen workers, who did not directly interact with Hooters customers, to receive a portion of the daily tips earned by front of house employees. The waitresses and bartenders complain that the tip credit was also improper because tipped employees spent more than 20% of their daily shifts engaging in non tip producing activities such as side work (e.g. cleaning the restaurant and stocking and replenishing the bar and service areas).

The federal court lawsuit against Hooters also claims that the restaurant shaved hours from employee paychecks. The restaurant workers were required to arrive at work before their scheduled start time and also had to remain at work until all customers departed from Hooters. The time spent at work before and after their designated shift time was unpaid.

The wage theft lawsuit against Hooters seeks compensation for unpaid wages, liquidated damages, attorneys’ fees and costs.

McDonald’s Settles Time Shaving Lawsuit

mcdonald's happy meal logo

A class action wage theft lawsuit brought by approximately 2,300 employees of various McDonald’s Restaurants owned by Crawford Restaurant Group in upstate New York.

The wage theft lawsuit, which was filed by the restaurant workers in 2013, alleged that McDonald’s did not pay its employees overtime pay, regularly engaged in time-shaving from employee payroll records, and committed other violations of the restaurant workers’ rights under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL).

This settlement, which was approved by U.S. Magistrate Judge Andrew T. Baxter on December 9, 2014, will provide back pay and damages for the employees who worked at the McDonald’s restaurants between May 6, 2007 and May 13, 2014. The settlement payment total has been kept confidential.

Banquet Hall Employees Sue the DoubleTree Hotel

double tree hilton logo

Banquet hall servers at the DoubleTree Hotel in Westchester, New York are suing for the hotel’s failure to pay minimum wages, overtime wages, spread-of-hours pay, unlawful deductions, and improper distribution of gratuities.

According to the collective action lawsuit filed in Manhattan federal court, DoubleTree waiters were not paid for the overtime hours they worked. Employees regularly worked more than 60 hours per week but were only paid for 40 hours a week. Additionally, according to the Complaint, the hotel retained service charge payments made by customers even though they reasonably believed that money would be distributed as gratuities for the workers.  Furthermore, DoubleTree failed to reimburse its staff for the laundering and maintenance of their uniforms.

The suit also alleges that employees did not receive the minimum wage and “spread of hours” pay required under the Federal Labor Standards Act (FLSA) and the New York Labor Law. Lawyers for the employees are seeking to recover their unpaid wages, liquidated damages and attorneys’ fees.

Managers of Papa Gino’s Sue For Overtime Pay Violations

papa gino logo

Managers of Papa Gino’s, an Italian restaurant chain found throughout Massachusetts and New England, have sued for overtime and breach of contract.  The named plaintiffs of the class action lawsuit, filed in the District Court of Massachusetts, held the titles of assistant manager, manager in training, and general manager throughout their employment by defendants.  Though the plaintiffs had managerial titles they almost exclusively performed non-exempt, non-managerial work that hourly employees also performed.  Their duties consisted of answering the phone, taking and preparing food orders, working at the grill and cash register, and cleaning.

The lawsuit alleges that defendants did not pay plaintiffs or other similarly situated “managers” for any hours worked in excess of forty each week, and that the restaurant shaved their hours.  Their paystubs, for example, indicated forty hours of work per week, regardless of the number of hours actually worked.  The workers claim that they were misclassified as managers, and they should have been paid overtime because.

Attorneys for the workers claim that the defendants violated the Fair Labor Standards Act (FLSA), Massachusetts Overtime Law, and Massachusetts common law.  The employees are seeking back pay, liquidated damages, and attorneys’ fee as a result of Papa Gino’s alleged unlawful pay practices.

Waiterpay Founder Featured on Brooklyn TV

Louis Pechman, the founder of Waiterpay, was a featured guest on BK Live’s June 2, 2014 segment on Tipped Wages.  The segment focused on pay issues in New York City restaurants, including concerns about the increase in lawsuits for illegal pay practices.  Among the topics discussed were the differences between minimum wage and tipped minimum wage, the complicated set of laws involving the tip credit, spread of hours, and other worker rights issues.

Food Network Celebrity Willie Degel Agrees to Pay $900,000 to Settle Wage and Hour Lawsuit

uncle jacks steakhouse logo

Uncle Jack’s Steakhouse and its owner, Food Network Celebrity Willie Degel, will pay $900,000 to settle a wage theft lawsuit filed against its restaurants located in Bayside, Queens and Midtown, New York City.  Ironically, Degel was featured on Food Network’s Restaurant Stakeout, a show which followed Degel as he visited restaurants across the country with hidden cameras to capture their food service problems and attempted to fix them.

On May 22, 2014, Judge Loretta Preska, Chief United States District Court Judge in the Southern District of New York, approved a $900,000 settlement between the restaurants and its workers, who alleged that their worker rights were violated by the restaurant.  Approximately 239 restaurant workers who worked between September 2002 and September 2008 at the New York City and Queens restaurants are expected to benefit from the settlement.

The lawsuit, which was filed in 2008 by captains, waiters, runners, bussers, and bartenders, alleged that the restaurants failed to pay them at the legally required minimum wage, routinely shaved their hours when they worked over 40 hours and refused to pay them overtime wages for hours worked over 40, misappropriated gratuities belonging to the waitstaff, failed to pay spread of hours pay when the employees’ workdays exceeded ten hours, and refused to pay for employee uniforms or laundering of such uniforms.

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