KMC Enterprises, Inc. is on the receiving end of a proposed class action lawsuit for alleged violations of the Fair Labor Standards Act and the New Jersey State Wage and Hour Law. The plaintiff says he worked as a server and bartender at the defendant’s restaurant—Prospectors Steakhouse & Saloon—located in Mount Laurel, NJ. The defendant allegedly reserves a “tip credit” from servers’ and bartenders’ pay, meaning it is permitted to pay them less than the required minimum wage if it meets certain requirements. According to the complaint:
“While restaurants may utilize a tip credit to satisfy their minimum wage obligations to servers and bartenders, they forfeit the right to do so when they require servers and bartenders to share tips with other restaurant employees who do not customarily and regularly receive tips.”
The suit argues that servers and bartenders at Prospectors Steakhouse are required to share tips with “expediters,” who work in the kitchen “readying food orders for pick-up by the servers” and do not receive tips from customers. By employing this policy, the defendant forfeits its right to apply a tip credit to employees’ pay and must compensate them the full minimum wage, the lawsuit claims.