Issues Per Se Encountered with NY Labor Laws
New York, Queens and the surrounding boroughs
Per Se is a popular, exclusive restaurant located at the Time Warner Center at Columbus Circle. Known for its Nova Scotia lobster, foie gras, caviar and truffles, Per Se caters to guests who pay for luxurious dining at a prix fixe of $310 per dinner. In addition, for private dining the restaurant requires a 20 percent service fee.
In 2015, The New York Times reported that the restaurant became subject to a New York State Attorney General’s Office investigation. The investigation revealed that the restaurant had misrepresented its private dining fee as gratuities for servers. However, servers did not receive tips from the fee.
Through a settlement reached with the Attorney General’s Office, Per Se agreed to pay $500,000 to the employees affected by the restaurant’s violations of state labor law. Another aspect of the agreement was that the restaurant would train the staff members responsible for dining events so they understood the labor laws and they would make it easy for employees to lodge labor law complaints.
The agreement also required that the restaurant designate a compliance officer to monitor labor practice compliance. In essence, the Attorney General’s Office decided the restaurant had misled customers who thought they were tipping the staff, and state law prevents this type of misrepresentation.
This is not the first high profile Manhattan restaurant to agree to similar settlements. Restaurant owners of Del Posto agreed to settlements in 2012 where they paid $1.15 million to current and former employees who complained about tipping and overtime violations. They also made a separate payment of $5.25 million in another agreement and distributed it to 1,100 workers at several of the owners’ restaurants.
The error made by Per Se was in calling the fee a “service charge,” which translated to “tip” in the minds of restaurant goers. Had Per Se used different language, it could have avoided the issue. In addition, the restaurant staff told some customers the 20 percent fee was a gratuity charge. Had they simply used acceptable language, the charge would have been legal. The restaurant’s spokes person pointed out that hourly servers’ wages were on the average between $16 and $28 and that a portion of the 20 percent private dining fee went toward workers’ wages. The average servers’ salary at Per Se is $116,000 per year, which includes overtime and gratuities.
It is vital to engage an experienced employment litigation lawyer in the legal aspects of your business. You can often avoid legal disputes, lawsuits and regulatory issues. For more than two decades, Stephen Hans & Associates has successfully defended employers’ rights in litigation and settlement negotiations.
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