Restaurant Law Blog

Friday, October 12, 2012

Owners Beware, Wage and Tip Lawsuits Are Picking Up Steam

Employees are becoming much more aware of their rights as evidenced by the fact that they are rushing to Courts in droves to claim foul against their employers for failing to pay them an appropriate wage or for 'stealing' their tips. Recently, employees of Centolire voiced complaints that they had not been paid for the final three weeks of business before it closed and filed for bankruptcy protection. Although no suit has been officially filed, one seems imminent. Likewise, some former employees at Bar Veloce are suing for unpaid wages and labor violations and recently took to the streets to voice their frustrations by posting fliers in the neighborhood urging patrons to boycott the establishment. Whether this is the right route to take or not, the owner has taken notice and filed a defamation suit for unlawful retaliation against the employees. Another owner, Philippe Chow, is being sued by over 50 employees for failing to pay minimum wage and overtime pay to his employees.

So, how do you protect yourself? As of today, New York State’s minimum wage is $7.25 per hour. This is technically the same for both tipped and non-tipped employees. Employers are permitted, however to take a credit against a portion of their employees’ earned tips up to $2.25 per hour for food service workers and $1.60 per hour for non-food servicer workers. In other words employers must pay tipped food service employees (so long they make at least $2.25 per hour in tips) a minimum wage of at least $5.00 per hour, or $5.65 per hour in the case of a non-food service employee. Employees must be paid for their overtime hours (anything over 40 hours per week, or 10 hours per day) at the rate of 1 1/2 times their normal rate of pay for each hour worked. Tipped employees must be paid time-and-a-half for the full minimum wage of $7.25 per hour less the $2.25 per hour tip credit. Tip pooling is permitted in New York State, however, employers are prohibited from taking an employee's tips or using them in any manner other than as a tip credits described above. Likewise, an employer is not permitted to force a tipped employee to share his or her tips with non-tipped employees.

In addition to fines and penalties imposed by the Department of Labor, employers who intentionally fail to pay appropriate wages can be criminally prosecuted and found guilty of a misdemeanor. An employer who is charged with a second offense for intentionally failing to pay his or her employees the proper wage can be charged with felony. If you find yourself in a position needing advice on this issue, be sure to contact an experienced attorney to help.

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