A class action lawsuit was filed in New York in April 2011 on behalf of waiters and busboys employed by Restaurant Associates, a large special events catering company. The employment law suit alleges that the "service charge" applied to all customers bills was in fact a "tip" or "gratuity" and should have been paid to the wait staff.
The case claims this practice violates New York Labor Law, section 196-d. The plaintiffs ask for $5 million in damages. The class is made up of over 100 employees of the catering company.
Why Tips Matter
If you are a tipped employee, the tip matters. If you are a waiter and received no tips during an hour of work, you would only earn the federal tipped employee wage of $2.13 hour. For 40 hours in a week, at that rate, the wages would be only $85.20.
Without tips, waiters and busboys are among the lowest paid workers in the U.S. economy. Tips are essential for wait staff to earn a viable living. The complaint notes that Restaurant Associates adds between 15 percent and 20 percent to all charges billed to customers.
The complaint suggests that most customers would expect part or all of the service charge would go to the waiters and other serving staff.
In support of their claim, the plaintiffs state that Restaurants Associates failed to disclose to customers that the service charge was not a gratuity or tip.
The complaint notes that Restaurant Associates is part of the Compass Group, which in 2009 earned over $20 billion, as measured in U.S. dollars. In 2007, Fortune magazine listed Compass Group as the world's 13th largest employer.
The plaintiffs also point out that employees are forbidden from accepting gifts and they could be terminated for discussing a gratuity with a customer.
New York courts have ruled in favor of employees in previous lawsuits of this nature.
Pay Disputes Generally
All employees are protected by various state and federal laws relating to their wages. If you feel your employer has violated a wage and hour law, speaking with a knowledgeable employment law attorney can to help answer your questions.
A lawyer can look at your facts and assess whether there has been a violation. An experienced lawyer can also advise you of the types of evidence you need to prove a violation, and can help you properly document your claim.
