New York City’s Restaurant Owners are Stealing Servers’ Wages and Tips – Here’s What You Do About it

Wage theft is commonplace in the restaurant industry from fast-food to upscale eateries.  In fact, the Department of Labor’s estimated that 84% of restaurants had violated labor standards including wage and tip laws from 2010 to 2012. In recent years, countless food service workers have sued their employers for these violations.  For example, McDonald’s paid $26 million to settle wage theft accusations from its cooks and cashiers in California this past November. In 2017, TGI Friday’s paid $19 million and Blue Hill at Stone Barns, named the best restaurant in America by Eater, paid $2 million for mismanaging tips and failing to pay overtime.  

The restaurant industry is permeated with labor law violations, but its workers are some of the most economically vulnerable. According to the Bureau of Labor Statistics, food service workers had a median salary of $21,750 or $10.45 per hour in 2018.  46% of tipped workers and their families depend on public benefits for assistance as a long-term subsidy for their low incomes. Ultimately, Saru Jayaraman, co-founder and director of the Restaurant Opportunities Center United says that “the poorest workers in America are being stolen from the most.”

What is Wage Theft? 

Wage theft occurs when a business intentionally or unintentionally withholds some of a worker’s pay. Tipped restaurant industry workers are more susceptible to wage theft because they do not have to get paid the federal minimum wage of $7.25 per hour.  Employers are only required to pay their tipped workers $2.13 per hour in direct compensation if that amount in addition to their tips equals the federal minimum wage. Many employers take advantage of this complex system to overwork and underpay their tipped employees.  In the restaurant industry, wage theft commonly takes place when employers pay the tipped minimum wage of $2.13 for non-tipped work like cleaning dishes, refuse to pay overtime, call for employees to perform off-the-clock work, pool the tips, or fail to provide meal breaks.  

How to Prevent Wage Theft

Tipped restaurant industry workers should be aware of their rights under the Fair Labor Standards Act to challenge their employers if they believe they are being underpaid.  Employees are protected by anti-retaliation laws to seek legal assistance in order to claim the payments that they are owed without repercussions from their employers.  Seven states have enacted laws that require tipped workers to be paid the state’s full minimum wage, allowing them to receive 15% more than tipped employees in other states. Many argue that “one fair” minimum payment for tipped and nontipped workers could prevent these workers from being exploited in the future. 

Seek Legal Assistance

If you are a victim of wage theft, seek legal assistance today. The Working Solutions Law Firm, located in New York City, can assist you. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.