Philadelphia Employment Lawyers: Wage Theft and Other “Unsavory” Employment Practices of the Restaurant Industry November 23, 2013
By Henry Yampolsky, Esquire
Recently, Galfand Berger, LLP represented five restaurant workers who claimed that their employer, a popular Philadelphia restaurant, engaged in wage theft.
The crux of our clients’ claims was that the restaurant, where they worked as servers, illegally kept a significant portion of their tips.
Unlike other workers, who must be paid at least a Federal Minimum Wage of $7.25 per hour, servers at restaurants are paid at a rate of $2.83 per hour, with the remainder of their wages coming from customer gratuities, or tips.
As is common in the restaurant industry, the restaurant in our case pooled the tips of the servers. Tip pooling is a practice where all the servers pull their tips together and then divide them at the end of the night. Often, servers will share a portion of their tips with bussers and other restaurant personnel who have direct customer contact. According to the Federal Department of Labor guidelines, tip pooling is a perfectly legal practice that ensures that tips are distributed fairly among restaurant staff. However, in our case, the workers alleged that the restaurant split the tips not only between servers, but also among kitchen personnel, who had no direct customer contact. Because, the restaurant is supposed to pay kitchen workers at least a federal minimum wage of $7.25 per hour, using tips from servers to pay kitchen staff subsidizes a restaurant’s legal obligation to their workers by taking away pay from one group of workers and giving it to the other. The courts and the Department of Labor have repeatedly held that tip pooling among servers and kitchen staff and other workers who do not have direct customer contact is a violation of the Federal Fair Labor Standards Act and thus illegal.
It was also alleged in our employment law case that that the restaurant instituted arbitrary tests for servers which it used to determine how much of their tips the servers got to keep. Any such tests, or other schemes, which put the gratuities earned by the workers into the pockets of the restaurant are illegal under both State and Federal Wage and Hour laws.
After negotiation with the restaurant, Galfand Berger employment attorneys were able to reach a settlement, without going to Court, under which the restaurant agreed to pay the workers all their back wages, liquidated damages and attorneys’ fees.
If you or someone you know has been a victim of wage theft, contact Galfand Berger, LLP and speak with one of our Philadelphia employment lawyers who can advise you of your rights under the State and Federal Wage and Hour Laws. Call our Philadelphia law offices at 1-800-222-USWA (8792) or contact us online. We also maintain offices in Reading and Bethlehem, PA, and serve all of Southeast Pennsylvania, including the Allentown and Harrisburg regions, and Southern New Jersey.
Read about the lawsuit here.