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Class Action Trend Watch – New York City Restaurant Workers' Wage Rights

Many restaurant workers—particularly those employed by one of New York City’s 45,000-plus eateries—are unaware that their employer may be robbing them of their rightful wages. Because so many class action lawsuits over unpaid restaurant wages come across our newswire every day, we thought it would be helpful to put together a collection of the most common wage and hour claims made by New York City restaurant employees who’ve said enough is enough.

If you’ve worked in a restaurant in any capacity—front or back of the house, I mean—you know how cutthroat and intense the working environment can be. You may also know that the further you are from the top of the totem pole, i.e. if you’re a server, bartender, busser, cook, or work in any other non-managerial role, the more vital is it to track exactly how much you’re being paid by the hour and/or in tips. In our experience, this is where many employers attempt to pull a fast one on the very workers who keep the lights on, and nowhere is this illegal practice more rampant than in New York City.

In many New York City restaurant workers’ lawsuits, it’s apparent that eateries think they can skirt by with illegal wage practices simply because their employees don’t know the details of state and federal workers’ rights laws.

Why New York City in Particular?

In many New York City restaurant workers’ lawsuits, it’s apparent that eateries—from Michelin star-rated destinations to the neighborhood greasy spoon—think they can skirt by with illegal wage practices simply because their employees don’t know the sometimes-obfuscated details of state and federal workers’ rights laws (which, it’s worth noting, are required by law to be posted where workers can see). And, in some cases, the restaurant owners don’t even understand the law themselves.

Adding to this plight, even though a movement has been growing for years to raise the federal minimum wage, tipped restaurant workers are the ones left out in the cold since the federal minimum wage is not the same thing as the tipped-worker or “tip credit” minimum wage (but that's another conversation for another day).

As noted in our first Trend Watch installment, it is our job here at ClassAction.org to keep an eye on any trends we come across that may affect our readers and those who may not realize that they’re being taken advantage of. Below, we’ve listed a number of common trends that show up in class action lawsuits filed by New York City restaurant workers over unpaid wages.

1. Failing to pay proper overtime wages.

This is the big one. Throughout a typical day here at ClassAction.org, nearly every restaurant workers’ wage and hour lawsuit we see stems from allegations that employees were not paid mandatory minimum, overtime, or spread-of-hours wages (which we’ll dive further into below). What some workers may not realize is minimum and spread-of-hours wages are tightly wrapped into overtime pay. Most restaurant workers must be paid time-and-a-half wages for all hours worked past 40 in a workweek. When workers are not paid time-and-a-half overtime, this means the hourly minimum at which they’re paid will almost always sink below what is allowable by law.

2. Failing to pay “spread-of-hours” wages.

Under New York Labor Law, restaurant workers are owed spread-of-hours wages when they work shifts that last longer than 10 hours in a workday. This includes time spent on meal or rest breaks and time in between shifts. Spread-of-hours pay premiums are calculated as one additional hour’s pay at the minimum wage and are added to a worker’s pay for a particular workday. Given how manic it can be to work in a restaurant—long hours, no time to breathe, double shifts, unruly customers, sometimes unrulier management—not to mention the frequency of unpaid overtime problems, violations of New York’s spread-of-hours pay rule are common.

3. Failing to pay the proper tipped minimum wage.

The hourly minimum wage for tipped workers employed by large restaurants (those with 11 or more employees) in New York is $2.40. For small restaurants with 10 or fewer workers, the hourly tipped minimum wage is $2.30. These dollar amounts are so low because, in theory, this hourly minimum combined with a worker’s total tips should add up to at least the non-tipped minimum wage benchmark. Unfortunately, tipped restaurant workers’ minimum wages can fall below what is legally acceptable due to unpaid overtime (as discussed above), or from employers . . .

4. Illegally taking a tip credit on tipped workers’ wages. 

Restaurants are only allowed to take a tip credit on tipped workers’ wages so long as the employees’ non-tipped job duties do not exceed more than 20 percent of the workday. As you may have assumed, this is a pretty common violation. Typically, employers will try to pull this one by . . .

5. Hiring someone to work in a tipped role (such as a delivery driver) but forcing them to do non-tipped work for most of their day.

Our newswire team has come across many class actions filed by individuals who say they were ostensibly hired as a tipped delivery driver (or in some cases as a tipped server), but instead were forced to spend more than 20 percent of their day cleaning, prepping food, or engaging in some other non-tipped work around the restaurant. When this occurs and an employer still attempts to apply a tip credit to workers’ wages, the workers may have grounds to file a wage and hour claim.

6. Failing to pay the proper non-tipped minimum wage.

This one is for back-of-the-house staff, such as cooks and dishwashers. For non-tipped employees, the minimum wage is $9.70 per hour as of December 31, 2016.

7. Forcing tipped workers to pool their tips with non-tipped employees, such as managers and food expediters.

This one pertains to tipped workers, such as servers, bartenders, and bussers. Illegal tip pooling, we’ve seen, can result in workers’ wages falling below the minimum wage. In New York, it is legal for employers to require tipped workers to share tips, but only with workers who also perform tasks that involve dealing directly with customers as a principle part of their job. It is against the law for an employer itself to keep any part of a tip pool. Similarly, supervisory or managerial workers are also barred from taking part in a tip pool.

8. Ignoring New York state “shirt changer” laws.

The business side of the New York restaurant scene is complicated. While some establishments operate under one ownership company, others are under the control of multiple companies acting as a joint employer. As a result, some New York City restaurant workers are required to split their work time between an employer’s locations. The problems start, however, when employers fail to pay workers for time spent traveling between locations.

9. Charging employees out-of-pocket for customer walk outs.

Sounds heinous, right? Unfortunately, some restaurants pin the tab for customer walk-outs on servers. This is illegal.

10. Not paying workers for “off-the-clock” work.

It’s exactly what it sounds like: some employers attempt to skirt their wage obligations by requiring workers to perform unpaid work either before the start of a shift or after it has ended. Illegal.

Have you worked in a restaurant while being subjected to any of the above wage and hour violations? Did you experience anything that we forgot to mention? Let us know in the comments below!

You can read our previous Class Action Trend Watch installment here

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