Eligible tipped employees must be compensated at least $5.00 per hour. If the restaurant that you work for does not pay you any wages whatsoever, such that you only receive gratuities, contact Pelton & Associates immediately for a free consultation. InSamiento v. World Yacht, Inc.
, 2008 WL 382346 (Feb. 14, 2008), the New York Court of Appeals found that mandatory service charges, previously excluded from gratuity treatment under the New York Labor Law, may now be considered under the statute a gratuity that must be received by the employee. Unless the employer communicates to patrons that it intends to withhold the service charge from their wait staff and other service workers, the service charges must be distributed to service employees. World Yacht
has profound affected the service and hospitality industries.
If the restaurant where you work maintains a mandatory service or gratuity fee, 100% of the gratuity charge is required to be paid to service employees (typically non-managerial front-of-the house employees with customer interaction). In the event that the restaurant retains a substantial portion of the gratuity, you likely have a claim for all gratuities illegally withheld.
While restaurants are allowed to take a tip-credit, which reduces their minimum wage requirement to $5.00 per hour, overtime premiums must still be paid at time-and-one-half the regular overtime rate, notwithstanding the tip credit. Pelton & Associates has successfully sued numerous New York area restaurants resulting in the recovery of hundreds of thousands in unpaid wages. In resolving one restaurant wage claim, our office obtained several hundred thousand dollars in unpaid wages and ownership of the restaurant in which they continue to work.
Kitchen employees are frequently required to work 10-15 hours per day and are often paid in cash, off –the-books, without any compensation for overtime or “spread-of-hour” pay. Pelton & Associates has prosecuted actions on behalf of kitchen employees required to work for less than minimum wage and has successfully obtained unpaid minimum wages and overtime without regard to immigration status.
Tip Pool Issues
While restaurants are allowed to require waitstaff to split their tips with other front-of-the-house employees, restaurants may not share tips with non-service employees such as dishwashers, cooks or managers. Restaurant may utilize either a tip share or a tip pool in which to distribute tips among service employees. Tip shares are used when waitstaff directly share tips with other employees while tip pools are used when all gratuities are pooled and then distributed at pre-determined percentages to participating employees. Employees may not be required to share in excess of a “customary and reasonable” portion of their tips, and the gratuities may only be paid to food-service-workers.
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