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.
Tip pooling was the topic of a recent Law 360 article that discussed the legal challenges the U.S. Department of Labor’s tip pooling rule could face. The tip pooling rule bars restaurants from requiring their wait staff to share tips with employees in the back of the house. The rule might be revisited in the wake of a new administration. Louis Pechman, founder of waiterpay.com was quoted in the article discussing tip splitting by front and back of the house workers.
New York Daily News has reported that Wahlburgers, subject of the popular A&E reality show by the same name, is being sued by former employees for unpaid overtime and tip violations. The attorneys for the former restaurant workers in the case is Louis Pechman, founder of waiterpay.com and Mitchell Schley.
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.
Johnny Utah’s has been hit with a complaint alleging sexual harassment, as well as minimum wage and overtime violations, tip theft, and spread of hours violations of the New York Labor Law and Fair Labor Standards Act.
The Complaint, filed on behalf of eight waitress at against Johnny Utah’s Rockefeller Center location in New York federal court, alleges the Midtown restaurant, which is advertised as a “wild west party” and known for its mechanical bull, subjected its female servers to unwanted sexual conduct such as inappropriate touching, comments, and propositions. The lawsuit alleges that among other things, servers were expected to flirt with patrons, ride the bar’s mechanical bull shirtless, and kiss other female servers. The waitresses and bartenders were expected to take shots with and sit on the laps of male customers and were told to ignore any unwanted touching. Any employee who complained was assigned fewer shifts or was terminated.
Additionally, the lawsuit claims that the servers did not receive the minimum wage, overtime, and “spread of hours” pay they were lawfully entitled to receive. According to the lawsuit, employees regularly worked 60 to 70 hours per week but were only paid for 40 hours of work. Servers also were required to share their tips with managers and their tip money was often withheld to cover cash register shortages.
Lawyers for the workers are seeking to recover minimum wages, overtime compensation, spread-of-hours pay, misappropriated tips, uniform-related expenses, unlawful deductions, compensatory damages, liquidated damages, and attorneys’ fees.
Big Texan Steak Ranch has agreed to pay $650,000 in minimum wage back wages and $150,000 in liquidated damages to 279 current and former wait staff following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which found violations of the Fair Labor Standards Act’s minimum wage and record-keeping provisions. Violations stemmed from an illegal tip pooling arrangement by the restaurant, in which management dipped into the tips of the waiters, waitresses, and busboys of the restaurant
According to the DOL’s investigation, Big Texan illegally retained a portion of the restaurant workers’ tips to pay for business costs, such as menus, glassware, trays and contest prizes. The restaurant also made illegal deductions from workers’ paychecks for uniforms and withheld additional percentages of tips as a disciplinary tactic, bringing those workers’ hourly wages below the required federal minimum wage. Additionally, the company failed to maintain accurate time and payroll records.
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 for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages, provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee’s tips combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers are required to provide employees notice of the FLSA tip credit provisions, and to maintain accurate time and payroll records.
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.
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.
Workers at Peter Luger’s, recognized by Zagat’s as the best steakhouse in New York, has agreed to a $250,000 settlement to resolve claims made against the Long Island location of the steakhouse for Fair Labor Standards Act (FLSA) and New York labor law violations, according to papers filed with the court.
Restaurant employees initially filed a complaint against the steakhouse in March 2013, alleging that the restaurant failed to pay them for all hours worked, specifically that the restaurant violated its workers’ rights by failing to pay proper overtime and minimum wages and spread-of-hours pay, and by maintaining an illegal tip pool. The Complaint alleged that the management deducted $20.00 from the tip pool every day, which would then be given to the kitchen staff at the end of the year.
The workers have asked the Judge Wexler to approve the settlement and certify the proposed class, which would cover 62 employees who worked at the restaurant’s Great Neck location as servers, waitstaff, waiters, and bartenders.