by Stephen D. Hans | Sep 27, 2011 | Wage and Hour
Author: Stephen D. Hans & Associates Between wage and hour lawsuits filed by the federal government and those filed by plaintiff’s employment law attorneys, the New York restaurant industry has been hard hit with legal conflicts and costly settlements in 2011. Are You Placing Your Business at Risk? Restaurants and other small businesses often place themselves at risk with improper record keeping, failure to pay minimum wages and overtime compensation. Adding to the problem are a maze of state and federal regulations that are difficult to understand, which makes it easy for restaurants to “trip up” and make potentially costly mistakes that can lead to expensive and time-consuming litigation. Examples of some of the wage and hour cases and settlements involving New York restaurants this year include: May 2011 – A federal judge in the Southern District of New York certified a class action suit against eight of Mario Batali’s New York restaurants. Batali’s restaurant servers claim that they are paid less than minimum wage and that the restaurants retain a portion of their tips unlawfully. March 2011 – The federal government filed a wage and hour lawsuit against a group of New York restaurants in Westchester and Rockland Counties. The American Beauty Diner, American Dream Diner and American Classic Diner, the restaurants’ owner and managers were named in the lawsuit after the DOL investigated the restaurants and accused the employers of violating the FLSA when they failed to pay employees minimum wage and overtime compensation according to federal law and violated recordkeeping regulations. The restaurants’ employees also claimed they were discriminated against after attempting to exercise their federal...
by Stephen D. Hans | Jul 15, 2011 | Wage and Hour
New York Employment Defense │ Wage and Hour │ NYS Supreme Court Decision The Wall Street Journal reports that the Metropolitan Movers Association (MMA), a moving & storage industry trade organization is suing NYC Comptroller John Liu for the second time in the last year for allegedly discharging his duties improperly in setting the prevailing wage rate for movers who perform work on contracts with the City. In a March 2011 decision, NYS Supreme Court Justice Alice Schlesinger ruled in the first lawsuit, that Mr. Liu “failed to fulfill his responsibility” under the New York Labor Law when his 2010 annual schedule of prevailing wages set rates of $30.63 to $38.90 for workers employed by moving companies on City contracts. Judge Schlesinger found that in setting the abnormally high wage rates, Comptroller Liu essentially disregarded his own office’s survey results which “reveal that workers in the moving industry, on average, receive a much lower wage of $19.19 per hour.” According to the Judge, such a substantial difference inevitably leads to “absurd results,” since workers would receive such staggeringly different pay on private jobs versus City jobs. In the wake of the decision in the first lawsuit, which is currently being appealed, Mr. Liu has faced criticism from many quarters alleging that his actions in setting such high wage rates are harming City taxpayers, since higher wages cause contractors to increase their bids accordingly and the City winds up footing the bill. Many have also questioned whether Mr. Liu’s close relationships with unions played a role in his decision to set such high rates. Indeed, Judge Schlesinger remarked in her...
by Stephen D. Hans | May 25, 2011 | Wage and Hour
Employee Tips – The Rule is “Hands Off” Author: Stephen D. Hans Stephen D. Hans & Associates, P.C. Among the many wage and hour problems that often trip up unwary employers, issues relating to the handling of employee tips ranks near the top. There are a myriad of ways that a business can make mistakes when it comes to policies on tips and their effect on employees’ pay. One common pitfall for some employers is embodied in Section 196-d of the New York Labor Law, which contains a blanket prohibition preventing any representative of management from taking any part of employee tips. Many employers incorrectly believe that as long as they are paying tipped employees above the minimum wage rate and are not taking a tip allowance reduction, the business or management can keep any tips left by customers for service employees. No matter how much a business chooses to pay its workers – even if it pays them $100/hour – the tipped employees must still be permitted to retain all tips received during their employment (in the hospitality industry, “tip pooling” and “tip sharing” arrangements are permitted, if certain specific requirements are met). Employers – mostly restaurants, banquet halls and caterers – also frequently run into trouble when it comes to so-called mandatory “service charges” that are automatically added to a customer’s bill. According to case law, when an employer adds such a charge as a matter of policy and the customer is led to reasonably believe the charge constitutes compensation that will be paid to the tipped service workers in lieu of a gratuity, then all the...
