A number of wage theft lawsuits and settlements have been occurring during the past five years. However, they haven’t received as much media attention as restaurant workers’ fight for higher minimum wages.
As a restaurant owner, you should be aware of what wage theft is and the ways it can occur. Ensure your restaurant managers aren’t engaging in wage theft activities.
Examples of Wage Theft and Related Lawsuits
Large chain restaurants have been subject to lawsuits for reducing hours, not paying proper wages for side work and for misappropriating tips.
Requiring workers to work off the clock is not legal but some chain restaurants have been settling claims that allege they’ve been doing this. The Huffington Post reported about several well-known restaurant chains that settled or paid huge sums in wage theft lawsuits.
Ruby Tuesday settled a case for $3 million in 2014. The restaurant avoided paying bartenders and servers overtime by having them do checklists before or after clocking in for work. They also shaved hour totals down to 40 hours/week when workers went over 40 hours.
Outback Steakhouses settled a $3 million lawsuit to workers claiming that the restaurant required workers to complete pre-shift work before clocking in.
A Papa John’s New York franchise had to pay more than $2 million in overtime rates under the order of New York State Attorney General Eric Schneiderman for rounding down hours worked to the whole number to avoid paying overtime, and for paying workers the “tipped minimum wage” when they mainly did un-tipped work and for not reimbursing employees for the purchase and maintenance costs of bicycles used in deliveries.
Red Robin Restaurants in Pennsylvania paid $1.3 million for requiring tipped workers to share tips with kitchen expeditors when the restaurant was taking tip credits and not paying servers a full minimum wage. Kitchen expeditors had no contact with customers and did not qualify to be paid as tipped workers.
Johnny Rockets had to pay 55 servers more than $570,000 under order of the Department of Labor (DOL) because they required servers to share tips with cooks and dishwashers.
Fourteen TGI Fridays servers received $485,000 to settle claims for having to spend more than 20 percent of their work time doing side work instead of directly relating to customers, which violates the 80/20 rule for tipped employees. Part of this settlement amount was also due to being forced to work off the clock.
Are You Concerned About Wage Theft?
If so, get legal advice as soon as possible. Stephen Hans & Associates is an employment law defense firm and can advise the best course of action for you to take as an employer