Ruby Tuesday’s Times Square location was sued for wage theft by a former bartender, Amanda Zarfos, who alleges that the restaurant failed to pay tipped employees for all hours worked and violated the so called 80/20 rule.
The lawsuit, filed in New York federal court, claims that during her employment at Ruby Tuesdays, servers and bartenders at Ruby Tuesday were improperly paid at the tipped minimum wage rate for all hours worked even though they spent more than 20 percent of her shifts performing work that involved no customer interaction and did not generate tips. For example, Zarfos was required to brew beverages, cut lemons, bake bread, help pack to-go orders, and wipe wood. According to the Department of Labor’s Field Operations Handbook,
The FLSA permits the employer to take a tip credit for time spent in duties related to the tipped occupation of an employee, even though such duties, are not by themselves directed toward producing tips, provided such related duties are incidental to the regular duties of the tipped employees and are generally assigned to the tipped employee. For example, duties related to the tipped occupation may include a server who does preparatory or closing activities, rolls silverware and fills salt and pepper shakers while the restaurant is open, cleans and sets tables, makes coffee, and occasionally washes dishes or glasses. However, where the facts indicate that tipped employees spend a substantial amount of time (in excess of 20 percent of the hours worked in the tipped occupation in the workweek) performing such related duties, no tip credit may be taken for the time spent in those duties. All related duties count toward the 20 percent tolerance.
Similarly, the New York Labor law has an analogous prohibition covering non-tipped work exceeding 20 percent of a shift.
Attorneys for the restaurant workers also claim that tipped employees were required to work off-the-clock without pay. The lawsuit claims that employees were not allowed to clock in despite the restaurant knowing and expecting them to start working. Willful refusal to pay employees wages for off-the-clock work is a violation of the Fair Labor Standards Act and the New York Labor Law.
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.
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:
- 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.
- 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).
- 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.
- 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.
- 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.
- 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.
- 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.
- Charging for Customer Walkouts
Servers should not be charged for customers who dine and dash.
- Breakage Charges
Servers do not have to pay for broken plates or glassware.
- Uniform MaintenanceWaitstaff should not be charged for buying or cleaning a uniform.
A tipped waiter who spends more than twenty percent of his time performing work which does not generate tips should receive the full federal minimum wage of $7.25 per hour and not the reduced wage for tipped employees allowed under the law, according to the Eighth Circuit Court of Appeals. The Court’s decision in Fast v. Applebee’s International, Inc., a class action case, was issued on April 21, 2011. The decision addresses important issues as to the proper rate of compensation for servers in restaurants who perform significant “side work.”
A “tipped employee” as used in § 203(m) of the Fair Labor Standards Act is defined as “any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” The tip credit, which allows restaurants to pay a reduced minimum wage (in New York that rate is now $5.00 per hour), applies only to workers engaged in an occupation where the employee “customarily and regularly receives more than $30 a month in tips.” The parties in the Applebee’s case did not dispute that the servers and bartenders involved in the case were engaged in an occupation in which they customarily and regularly received at least $30 per month in tips and were “tipped employees” under the FLSA. The dispute before the Court revolved around whether the servers and bartenders were “engaged” in those occupations when Applebee’s required them to perform duties that did not directly result in a tip, such as cleaning and maintenance duties commonly referred to in the restaurant industry as “side work.” Applebee’s argued that the statute is focused on the occupation, not the specific duties performed, such that the restaurant could take the tip credit for the entirety of a server’s or bartender’s shift, as long as the employee received sufficient tips during the shift to make up the difference between $2.13 per hour and $7.25 per hour, regardless of how much time the employee spent performing tip-producing duties. The employees argued that Applebee’s required them to perform duties outside of the server and bartender occupations for significant parts of their shifts, such that they were entitled to full minimum wage rates when they were not “engaged” in the duties of those occupations.
The Court of Appeals agreed with a lower court decision that as long as the time spent performing non-tipped duties is substantial, the tip credit may not be used for these hours performing non-tipped work. The Court adopted the twenty percent threshold set by the United States Department of Labor’s Field Operations Handbook as a guide to determine whether the non-tipped work was substantial or merely incidental to the employee’s tipped duties.
In January of this year, the New York State Department of Labor issued a Hospitality Industry Wage Order in which it also adopted an “80/20” rule, stating that on any day that a service employee or food service worker works at a non-tipped occupation (a) for two hours or more, or (b) for more than twenty percent (20%) of his or her shift, whichever is less, the wages of the employee shall be subject to no tip credit for that day.