Connecticut Court Orders $1.3 Million Judgment in Chip's Restaurants Tip Theft Case

A Connecticut Court issued a $1.3 million judgment last week against Chip's Family Restaurant chain. The ruling followed a class action lawsuit brought by servers who alleged the restaurants failed to pay them minimum wage when they were doing non-service related work. The damages cover around $1 million in back wages and almost $323,000 in interest.

The lawsuit filed by the restaurant employees contended the restaurant violated Connecticut law, which states that "if an employee performs both service and non-service duties, and the time spent on each is definitely segregated and so recorded, the allowance for gratuities as permitted as part of the minimum fair wage may be applied to the hours worked in the service category."

Until 2020, when the state adopted a new policy, restaurants were required to pay the full wage for time spent onside work. 

The restaurant challenged the claims of their waitstaff. They argued the servers did not spend more than 15-20 minutes completing non-service work, and believed they were in compliance with the state's tip credit laws.

Connecticut's tip credit law allows workers who collect gratuities to be paid a wage below the state minimum of $15 an hour, as long as the employee's tips make up the difference. If the tipped minimum wage plus the employee's tips do not meet the minimum wage requirement, the employer must make up the difference.

If you have been the victim of wage theft or have questions about your rights as a worker, contact the attorneys of Pechman Law Group at 212-583-9500.

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