Over the last year or so, there’s been a big increase in the number of wage-and-hour suits brought against New York restaurateurs big and small, famous and, well, not as well known.
Because of the increase in litigation, a panel of restaurant industry observers held a town-hall-like meeting last month that offered operators tips on how to work smarter and avoid getting ensnared in wage-and-hour litigation.
The meeting, entitled “How to Protect Your Restaurant,” was sponsored by Culintro LLC, a New York-based culinary trade organization, and featured such panelists as Carolyn Richmond, a partner in the law firm Fox Rothschild LLP, and Will Regan, chief executive of 3Sixty Hospitality, a back-office management consultancy.
Richmond and Regan discussed numerous wage-related issues, including tip pooling, which Richmond called “the big pink elephant in the room.”
While tip sharing is not illegal in New York State, the more difficult issue is getting employees to pool their tips with all employees instead of a select few, namely those at the front-of-the-house.
Changes to the wage laws are afoot in New York, and a special committee formed by the labor commissioner has been meeting this year to offer suggestions on revising the current labor laws. In fact, Richmond, who has represented a number of restaurant operators in class-action wage-related suits, was one of several industry experts to offer testimony last summer at one of the committee’s public hearings. At the Culintro meeting, she told attendees that the largest areas of legal activity now include violations related to overtime, tip and service charges.
Regan added that a lot of labor attorneys have realized these are easy lawsuits to bring, ones that can be extremely lucrative for them.
“It’s low-hanging fruit,” he said. “These [class-action] cases are easy; attorneys are not spending 10 years trying to put these cases together.” And if they win, he said, “the plaintiff may only get a few thousand dollars, but the attorneys get one-third [of the judgment].”
What was Richmond’s and Regan’s advice? Use common sense and keep proper records on employees’ hours. The Labor Department will request such documentation the moment wage-related lawsuits are filed.
“Teach your employees how to properly clock in and clock out,” Richmond said. “You have to get the employees used to using a time clock; it’s a whole lot cheaper than paying me and the other lawyers.”
Now, I’m not a restaurateur, but this seems like sound advice. An old-fashioned time clock could literally put time on your side in staving off the modern problem of wage-related litigation.— [email protected]