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Restaurant Worker Ripoffs

This page concerns the rules for restaurant workers in New York. The American Wage Theft Crisis is nowhere more pronounced than in the restaurant industry.

Restaurant employees are often underpaid and exploited victims of wage theft. These include front-of-the-house tipped employees like waiters and busboys as well as the non-tipped back-of-the-house employees like dishwashers and cooks.

Restaurant employers often steal workers’ tips, and fail to pay minimum wage, overtime and spread of hours premium pay.

However, New York has some of the strongest protections for tipped employees in the country.

For example, the statute of limitations for these claims is six years, while many states give workers much less time to bring their claims.

In addition, New York has a high minimum wage and a low tip credit allowance compared to most of the country. New York also has special protections for tipped employees not found in most states.   

Tip Stealing and “Service Charges” in the Restaurant Industry

Tips belong to the service staff. New York Labor Section 196-d prohibits management from stealing tips or sharing those tips with non-service staff.

Members of the service may pool their tips under certain circumstances. However, management employees cannot participate in the tip pool.

Many restaurants and catering service will add a “service charge” or administrative fee to a customer’s bill. Customers often reasonably believe the charge will cover gratuities for the restaurant staff. However, many employers keep these charges for themselves.

Section 196(d) of the New York Labor law protects catering workers from having their tips misappropriated in this way. Before management can take any portion of those “service charges,” they must strictly comply with the customer disclosure requirements.

Restaurant Wage Theft: Tip Credit Rules

Wage theft in the restaurant industry often occurs when employers fail to follow the tip credit rules. The minimum wage in Nassau County, Suffolk County, and NYC is $15.00 per hour. However, employers may take a $5.00 minimum wage credit provided they follow three strict requirements of the tip credit rules. As a result, the minimum cash pay rate for tipped workers is only $10.00 per hour.

First, employers must pay tipped workers in the food service industry in NYC, Westchester and Long Island the full tipped minimum wage.

Second, the worker’s their tips must be sufficient to bring their pay up to or above the full minimum wage.

Third, the employer must provide full disclosure of the tip credit payment system to the restaurant workers.

Fourth, the tipped food service worker may not spend too much time performing non-tipped work. The 80/20 rule requires that workers spend no more than 20% of their shift performing non tip-producing work. IN addition, tipped workers can spend no more than two hours performing non tip-producing work.

In many cases, employers fail to comply with one or more of these requirements. This makes the employer ineligible to take a tip credit for those hours.

Restaurant Wage Theft: Double Dipping on the Tip Credit

Restaurant employers often commit wage theft by illegally double dipping on the credit and taking an additional unauthorized credit for overtime hours. The tipped minimum wage for overtime hours is equal to 1.5 times the minimum wage minus the tip credit. For food service workers in Westchester, NYC and on Long Island the tipped minimum wage for overtime hours is $17.50.

For tipped workers in Westchester, Long Island and NYC, who do not perform food service work, the tip credit is $2.50. The minimum cash wage for these workers is $12.50 per hour. The tipped minimum wage for overtime hours for these workers is $20.00 per hour.  

2022 Cash Wage Tip Credit Overtime Cash Wage
Nassau, Suffolk, Westchester, and NYCFood Service Workers$12.50 $2.50 $20.00
 Other Service Employees $10.00 $5.00 $17.50
Upstate NYFood Service Workers $8.80 $4.40 $15.40
 Other Service Employees $11.00  $2.20  $17.60
2023 Cash Wage Tip Credit Overtime Cash Wage
Nassau, Suffolk, Westchester, and NYCFood Service Workers$12.50 $2.50 $20.00
 Other Service Employees $10.00 $5.00 $17.50
Upstate NYFood Service Workers $  9.45 $4.75 $16.55
 Other Service Employees $11.85  $2.20  $19.10

Salary and Shift Pay Scams

Salaried non-exempt employees in the restaurant industry are often victims of wage theft. Even if an exempt worker is paid a salary, employers must still pay them workers time and a half for overtime when they work more than forty hours in a workweek.

Unpaid Expenses

Restaurant businesses must pay for itsown expenses. They cannot charge workers for those expenses.

Customers sometimes walk out on their bill. The business must pay that cost. They cannot charge the workers for that that cost.

In addition, employers cannot charge workers for the cost of breakages or returned meals.

Moreover, employers are responsible for the cost of employee uniforms and uniform maintenance if paying minimum wage.

Spread of Hours Pay 

Spread of Hours premium pay applies when a worker in the hospitality industry works more than ten hours in a workday. The amount is equal to one hour at the applicable minimum wage. In Nassau County, Suffolk County, and NYC, hospitality workers must be paid an additional $15.00 for each spread of hours shift they work.

This includes working a shift of longer than ten hours. This also includes working two shifts in a day where the second shift ends more than ten hours after the first shift starts.

The employment lawyers of the Marlborough Law Firm have the experience to effectively help our clients fight restaurant wage theft. We handle cases in Nassau County, Suffolk County, and the five boroughs of New York City.  We fight for workers against restaurant industry ripoffs. If you believe you are a victim of restaurant wage theft, call us for a free consultation.

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