NEW YORK —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
In recent hearings before the 2009 Wage Board, operators and other interested parties testified that the industry would benefit from clarification on how overtime rates are calculated for tipped employees whose employers receive tip credits and more specific guidance on tip sharing and tip pooling, including the ability to make tip pooling mandatory. Operators also are seeking guidance on practices concerning gratuities and service charges related to banquets and relief from the state’s wash-and-wear rules regarding uniforms. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
The six-member board is now putting together its recommendations for the state’s labor department, which will then decide whether or not to implement the changes. The board’s report is scheduled for release later this month. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
The anticipated changes could help to reduce the number of tip-sharing and wage-and-hour lawsuits that have recently plagued New York operators, said labor attorney Carolyn D. Richmond of the law firm Fox Rothschild LLP. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
“A lot of issues came to a climax this year, and certainly there is a need for change,” Richmond said. “The amount of class-action lawsuits has [skyrocketed]—just look at the [court] docket for the Southern District of New York. It’s fair to say that almost on a daily basis a wage-and-hour class-action lawsuit is filed against a restaurant, from the mom-and-pop shops to the large restaurant companies.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
Richmond noted that one problem with the labor department’s current interpretation of New York law is that restaurant owners cannot make tip pooling mandatory, so employees can opt out of tip pooling at any time. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
According to the labor department’s interpretation of the law, “if out of 20 servers 19 decide to participate and one does not that’s acceptable,” Richmond said. “But that creates an untenable situation for a restaurant. How do you isolate one employee? The rest will be hard pressed to cooperate if that one employee doesn’t want to help out. Dining rooms don’t function that way.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
Commissioner M. Patricia Smith convened the 2009 Wage Board in March in anticipation of the increase in the hourly minimum wage from $7.15 to $7.25 an hour on July 24. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
In testimony before the wage board, E. Charles Hunt, former executive vice president of the New York City chapter of the New York State Restaurant Association, explained the confusion and dissension the current tip-pooling guidelines create. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
“NYSRA would like the department of labor to follow the vast majority of other states and permit mandatory tip pooling not only to assist restaurant owners, but also because it benefits the employee,” he said. “The way the guidelines are currently written, tip pools are strictly voluntary and set up and administered by the employees. Any employee can opt out at any time. Therefore, it could be interpreted that the employees should decide prior to each shift whether or not to pool tips. This is both impractical and unreasonable.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
Hunt added that because of high employee turnover and varying schedules, the workers participating in a tip pool would constantly be changing. As a result, he said, “NYSRA believes this current system creates great uncertainty and often discord among the employees, and all would be better served by a mandatory tip-pooling system.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
Over the last two years a number of New York operators, including Myriad Restaurant Group, Bobby Flay, Fireman Restaurant Group and Tom Colicchio have been sued for alleged tip pool infractions. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
Most restaurant companies that are sued eventually settle out of court because it typically is more cost effective to do so, Richmond said. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
“Restaurant owners are just not sure what the answer is because they’re not getting a lot of clarity from the New York Labor Department,” she said. “The cost of litigation is often prohibitive, so most restaurant suits don’t go through the court system. Many are resolved through mediation or otherwise settled.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
As a result, she noted, “There is not a lot of case law to base decisions on. Most cases resolve outside of court because the cost of litigating outweighs the benefits sometimes.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
But tip pooling is just the tip of the iceberg, noted Melissa Fleischut, director of government relations for NYSRA. She said the group also is asking for clarification on the regular rate of pay for overtime in the case of tipped employees. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
“Right now it is one-and-a-half times $7.25 and then you subtract the tip allowance, which is $2.60 per overtime hour worked,” she said. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
The industry is also hopeful that the labor department will change the wash-and-wear rules pertaining to employee uniforms. Currently employers are required to pay employees $9 a week for uniform maintenance. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
“Our wait staff wears what is considered an ordinary wardrobe that consists of jeans, khakis or black pants and a black shirt,” said Jasper Alexander, owner of Hattie’s Restaurant in Saratoga Springs, N.Y., in his testimony before the board. “We do provide and pay for laundering of their aprons, which they are required to wear. All other clothing is provided and laundered by the employee because all of it may be worn for normal, everyday activities. If the additional cost to the employee incurred by their clothing is a real concern for the state, then they should create a tax write-off for clothing cost and maintenance.” —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
Richmond said she is hopeful that change will occur as a result of the wage board’s report, but she is not sure by how much or when it will happen. —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.
“I understand a lot of drafts [of the report] have gone back and forth in the last month or so,” she said. “Unfortunately, I do not expect the restaurant industry to make as much headway as they should. They are fighting for survival right now in many respects. While I anticipate some positive changes in certain areas that the Wage Order covers, I am not sure that the Department of Labor fully understands how much the wage order really affects an operator’s bottom line.”— [email protected] —Following a spate of lawsuits claiming alleged tip-pooling infractions, this state’s restaurant community is pushing for change in wage-related regulations governing tip sharing as well as overtime pay and uniform care.