A number of wage theft lawsuits and settlements have been occurring during the past five years. However, they haven’t received as much media attention as restaurant workers’ fight for higher minimum wages.
As a restaurant owner, you should be aware of what wage theft is and the ways it can occur. Ensure your restaurant managers aren’t engaging in wage theft activities.
Examples of Wage Theft and Related Lawsuits
Large chain restaurants have been subject to lawsuits for reducing hours, not paying proper wages for side work and for misappropriating tips.
Requiring workers to work off the clock is not legal but some chain restaurants have been settling claims that allege they’ve been doing this. The Huffington Post reported about several well-known restaurant chains that settled or paid huge sums in wage theft lawsuits.
Ruby Tuesday settled a case for $3 million in 2014. The restaurant avoided paying bartenders and servers overtime by having them do checklists before or after clocking in for work. They also shaved hour totals down to 40 hours/week when workers went over 40 hours.
Outback Steakhouses settled a $3 million lawsuit to workers claiming that the restaurant required workers to complete pre-shift work before clocking in.
A Papa John’s New York franchise had to pay more than $2 million in overtime rates under the order of New York State Attorney General Eric Schneiderman for rounding down hours worked to the whole number to avoid paying overtime, and for paying workers the “tipped minimum wage” when they mainly did un-tipped work and for not reimbursing employees for the purchase and maintenance costs of bicycles used in deliveries.
Red Robin Restaurants in Pennsylvania paid $1.3 million for requiring tipped workers to share tips with kitchen expeditors when the restaurant was taking tip credits and not paying servers a full minimum wage. Kitchen expeditors had no contact with customers and did not qualify to be paid as tipped workers.
Johnny Rockets had to pay 55 servers more than $570,000 under order of the Department of Labor (DOL) because they required servers to share tips with cooks and dishwashers.
Fourteen TGI Fridays servers received $485,000 to settle claims for having to spend more than 20 percent of their work time doing side work instead of directly relating to customers, which violates the 80/20 rule for tipped employees. Part of this settlement amount was also due to being forced to work off the clock.
Are You Concerned About Wage Theft?
If so, get legal advice as soon as possible. Stephen Hans & Associates is an employment law defense firm and can advise the best course of action for you to take as an employer
With the plethora of government regulations, restauranteurs caught up in the every day activities of running a restaurant hardly have time to stay apprised of new restaurant industry regulations. Even so, they must know about changing regulations and the impact on their business.
The U.S. Department of Justice (DOJ) announced in December 2012 that “food allergies may constitute a disability under the Americans with Disability Act (ADA).” Previously in October 2009, the DOH received a complaint alleging that Leslie University had violated the ADA by not making modifications in its polices that would permit students with celiac disease and/or food allergies to enjoy the university’s food service and meal plan program. Read More
According to the National Restaurant Association (NRA), the DOJ indicated that under the ADA restaurants may have to make reasonable accommodations for individuals with food allergies, Read More
At Hans & Associates, we keep pace with regulatory changes and rulings that affect the restaurant industry. Our New York employment defense lawyers can help you stay up-to-date and assist you with compliance and regulatory issues.
Author: Stephen D. Hans & Associates, PC: Stephen D. Hans
Gone are the days where servers pocketed their tips, walked off the floor, and clocked out to go home. Many people do not realize that the special tip they gave to reward a friendly smile or diligent service is frequently lost within a pool of other tips.
In January 2011, the New York Labor Department put new rules into effect that allowed restaurant owners to determine whether employees would share tips with each other or put tips into a pool and divide them up afterward. Employees eligible to receive their portion of tips generally include servers, bartenders, bus personnel, and hosts or hostesses.
The two main tipping systems allowed include:
- Sharing tips. Servers collect tips and give a portion of them to those who bus or host.
- Pooling tips. The restaurant assigns a tip percentage or point system for each job category and all the tips are pooled together and divided up among the staff (not kitchen employees). Read More
An experienced New York employment defense lawyer can help businesses put a legally sound plan in place and also address the many other regulations required when running a restaurant. Hans & Associates, P.C. has helped businesses handle employment issues throughout Queens and New York City for more than 30 years.
Author: Hans & Associates, P.C.-Stephen D. Hans
Like other businesses, New York restaurant owners face significant challenges in today’s job market. Currently, members of the New York legislature have proposed raising the minimum wage from $7.25 to $8.50. From a restaurant owner’s standpoint, how would this affect running a restaurant?
As with many issues today, divisive views exist. However, both sides of the debate agree that the restaurant industry is one of the most affected by minimum wage increases. This is because most restaurants set wages at or around the minimum wage rate.
Syracuse.com reported estimates by an assistant research professor, Jeanette Wicks-Lim at the Political Economy Research Institute at the University of Massachusetts. She calculated that restaurant owners would raise a $20 meal to $20.20 to cover the wage increase expenses. She said wage increases would not necessarily result in layoffs. In contrast, Michael Saltsman, a research fellow at the Employment Policies Institute, partly funded by the food industry indicated that historically, minimum wage increases have resulted in layoffs. Read More
With legal changes looming on the horizon, restaurant owners are wise to consult their accountants and New York employment defense lawyers to make sure they comply with regulations and avoid fines or lawsuits.
Author: Jeffrey K. Brown: Waiters Rights
Leeds, Morelli & Brown, PC: New York Employment Law Attorneys
Jeffrey K Brown, Leeds Morelli & Brown, PC
NY caterers fighting to dismiss current unpaid tips claims by employees and former employees
With the help of the NY senate, New York area catering halls have proposed two bills to avoid paying their workers’ for existing claims regarding unpaid tips which were taken as “mandatory gratuities” from catering customers. The two bills currently being considered in Albany would retroactively end the claims of workers in many recently filed lawsuits in New York, where employees and former employees are seeking payment of unpaid gratuities under Section 196(d) of the state Labor Law.
Jeff Brown, a partner at Leeds, Morelli & Brown, P.C., represents workers in many of the lawsuits that have been filed against caterers across the New York area. “They want the law to say ‘you can’t be sued from today going back, but you promise not to do it going forward… And they were hoping to sneak this by in the legislature without anyone noticing it. Meanwhile the workers will be left in the cold” said Mr. Brown. Lenard Leeds, also a partner at Leeds, Morelli & Brown, P.C., added, “These greedy owners simply do not want to pay the workers the gratuities that they rightfully earned, that the owners collected, and that the courts have held must be paid… They want to retroactively say they have done nothing wrong – even though that’s not what the law and the courts have said.”
Under Section 196-d of the New York State Labor Law: “No employer or his agent or an officer or agent of any corporation, or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee. This provision shall not apply to the checking of hats, coats or other apparel. Nothing in this subdivision shall be construed as affecting the allowances from the minimum wage for gratuities in the amount determined in accordance with the provisions of article nineteen of this chapter nor as affecting practices in connection with banquets and other special functions where a fixed percentage of the patron’s bill is added for gratuities which are distributed to employees, nor to the sharing of tips by a waiter with a busboy or similar employee.” Read More
Our lawyers excel at helping its clients collect the compensation they have earned and the justice they deserve. If you or someone you know has been faced with a labor dispute, unpaid overtime, wage dispute, employer discrimination, or just looking to speak with an employment attorney, please contact our law office, Leeds, Morelli & Brown, PC, 1-888-5-JOBLAW, at One Old Country Road, Suite 347, Carle Place, NY, 11514-1851.