Restaurants are Prime Targets for Overtime Claims
Recently there has been a spate of multi-million-dollar wage and hour lawsuits and an increasing number of audits by the NYS Department of Labor targeting New York City restaurants. Among the restaurants hit are Club 21 (filed March 17, 2009), the Saigon Grill (judgment in October 2009 for $4.6 million), and, most recently, Iron Chef Bobby Flay’s Bar Americain and Mesa Grill (filed January 9, 2009). On March 18, 2009 NY Labor Commissioner M. Patricia Smith announced a $2.3 million settlement with Ollie’s Noodle Shop and eight other restaurants owned by Tsu Yue Wang. This comes on the heels of the DOL’s January 2009 announcement that it would partner with community groups in its continuing effort to crackdown on wage violations.
Such announcements are symptomatic of a nationwide crackdown on an industry with significant exposure to overtime claims, due to some of the industry’s most common practices. In the food service sector, where many workers accept long hours in order to increase their earnings (which are based primarily on tips), poor recordkeeping, cash payments, failure to handle tips correctly, improper distribution of tips, tip pooling, deductions from pay for costs such as the laundering of uniforms, and various other wage and hour issues place employers at heightened risk. The laws governing eateries are often complex, and most restaurant owners are unaware of their legal obligations to pay their workers properly. Unfortunately, many restaurant owners are following follow long-established (but illegal) industry practices, which is resulting in the type of actions cited above. Today, workers are being educated as to their rights by attorneys and workers’ rights groups, and are much less hesitant than in the past to participate in claims against their employers. Until a fundamental change is made by restaurants in general, there is no reason that this wave of lawsuits and audits will subside anytime soon.
Great reminder that employers across the nation need to pay special attention to overtime requirements. Employers in California have for some time now faced these lawsuits, but it appears that these types of cases are picking up through the rest of the nation.
I would like to know if it legal for a manager to go behind the bar and receive tips under a salary pay when there are adequate bartenders to complete the job/
If the restaurant participates in a tip pooling or tip sharing program, then what you described may render such program invalid under federal law. In addition, depending on what state you are in, it may or may not be legal for a manager to share tips which are meant for employees.
You may wish to consult with employment counsel in your local area.