There are reports demonstrating that in 2015 there were over 45,000 eating and drinking establishments in New York. There are an estimated 24,000 restaurants in Manhattan alone. According to the National Restaurant Association, in 2017, the number of people employed in “food service” in New York is well over 800,000, with approximately 640,000 of them working in restaurants.
Waiters and waitresses, servers, runners and bartenders who work in restaurants are known as “tipped employees” and are a segment of the workforce plagued by industry-wide wage theft. Why? Perhaps it is the complex web of rules that regulate wages in this particular niche occupation. Or, maybe, these workers, who are already earning low wages, are most afraid of losing their jobs if they question their employers’ practices.
The truth is, if you work in a restaurant, you should be especially aware of your rights. There is a lot of room for your employer to make deductions, calculations, and withholdings that violate federal or state wage and hour laws.
If you are a regularly tipped employee at a restaurant such as a server, bartender or runner, you should be on the lookout for some of the following acts of wage theft:
Failure to pay minimum hourly wages – Restaurants in New York must pay their waitstaff either the minimum wage or the tipped minimum wage. The minimum wage in New York is between $9.70 per hour and $12.00 per hour depending on the size, type location of your employer’s business. The minimum wage for tipped workers in New York is $7.50 per hour plus $2.20 – 3.50 per hour tip credit to equal the standard minimum wage. Often, restaurants simply pay the wrong minimum wage or make deductions that bring workers’ pay below the minimum wage.
Tip theft – Owners and managers may not take a part of tips for themselves. They may not take tips to pay kitchen workers or any other non-server or back of the house employees. Tip pooling and sharing arrangements must comply with New York wage orders. For example, if tips are getting pooled and distributed to the manager and dishwasher, the tip-pool most likely violates the law.
Unpaid overtime – Restaurants must pay food servers overtime for hours worked over 40 in a workweek. Overtime is one and a half times the regular rate of pay. For a tipped worker the overtime rate is one and a half times the minimum wage minus the applicable tip credit. For example: If you work in a restaurant on Long Island where the minimum wage is $10.00. The tipped minimum wage is $7.50, and the tip credit is $2.50. Calculating the overtime rate of pay looks like this:
$10.00 x 1.5 = $15.00
$15.00 – $2.50 = $12.50
So, for every hour over 40 in a given workweek, you should earn $12.50 per hour as a cash wage.
Stealing service charges – In New York service charges added to a bill are presumed to be gratuities that belong to tipped employees. If the customer believes they are for the waitstaff, then they belong to those workers and not the employer. Customers must be notified if any service charges are NOT for the waitstaff.
Failure to provide proper notice of a “tip credit”- The law requires employers to provide specific notices to employees about the use of tip credits before they can pay the reduced minimum wage. This notice can be written or oral but must contain information about the amount of the credit, the amount of the cash wage, the amount of the overtime wage and additional information specific to the employer and employee. .
Violation of New York’s spread of hours rule – Did you know that if you work more than 10 hours in a day, your employer must give you an extra hour of pay at the full minimum wage rate?
Improper deductions for breakages, uniforms, and walkouts – Waiters, waitresses and/or servers should not have to pay for broken dishes or glasses, or meals when customers walk out without paying.
Improper credit card fee charges – In New York, when a customer leaves a gratuity on a credit card, the restaurant may deduct a percentage of the finance charge imposed by the credit card company. For example, if the company charges a 5% transaction fee, the employer can deduct 5% of the tip, but not more.
The New York State Department of Labor (DOL) has helped recover millions of dollars for workers in all industries who are victimized by wage theft. If you need assistance collecting your unpaid wages or tips, contact Leeds Brown Law, P.C. Our New York attorneys can help if you and your co-workers are victims of wage theft, tip theft, unpaid overtime or any other violation of federal, state or New York City wage and hour law. You can reach lawyers representing restaurant employees in New York at 1-800-585-4658.