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List of high-volume NYC restaurants sued over tips grows by one

NEW YORK Asia Five Eight LLC, operator of the high-volume Tao Asian Bistro in New York City, has joined the list of upscale independent restaurants that have been sued by employees for allegedly violating state and federal wage-and-hour regulations.

The complaint, filed Thursday in U.S. District Court here on behalf of former servers Greg Prasker and Michelle Larusso, alleges that Tao misappropriated tips and did not compensate its employees for working overtime hours.

The restaurant reportedly generates annual sales of $26 million. Representatives of Asia Five, whose Las Vegas Tao is estimated to take in $55 million annually, did not respond to requests for comment by the time of this posting.

The plaintiffs’ attorney, Justin M. Swartz of Outten & Golden LLP, would not specify the amount of damages being sought. But he indicated that similar lawsuits may be filed against other restaurants in the near future.

Tao is “the next in a series of suits against New York City restaurants that violated Fair Labor Standards Act and New York labor laws,” Swartz said. “Our law firm has been flooded with calls from restaurant workers concerning misappropriated tips and failure to pay minimum wage. It’s endemic in the New York City restaurant industry.”

Among the New York restaurant operators who have already been sued for alleged wage-and-hour violations are Daniel Boulud, Drew Nieporent, Keith McNally, former Smith & Wollensky operator Fourth Wall Restaurants Inc., and Fireman Restaurant Group, which is in the process of settling two claims, one totaling $588,000 that was finalized last week and another for $3 million that is expected to be approved within the next two weeks.

Prasker and Larusso filed their suit “on behalf of hundreds of workers at Tao,” Swartz said. “They are suing for all of the tips that were misappropriated from them and all of the overtime they were not paid for.”

He also asserted that the company misappropriated service charges and mandatory gratuities paid by customers who held parties and banquet functions at the restaurant.

“Customers believed [the tips] were going to the workers, but the restaurant kept them,” Swartz said. “It’s not just the restaurant workers who were harmed here; if I were a customer who paid a mandatory gratuity, I’d feel burned.”

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