Restauranteur Sued for Unpaid Tips in New York City

By Leeds Brown Law | April 18, 2016

Do you ever go to a restaurant and wonder how much money your waiter earns, or who receives the tip you leave on the table? Most people probably don’t think much about it. We assume our server earns minimum wage and that the same server gets to keep the tip. However, sometimes things are not as they seem, as evidenced by a lawsuit filed recently in New York.

New York City restaurant mogul Danny Meyer, and his company, Union Square Hospitality Group, are being sued by two former busboys. The plaintiffs, Uzzol Siddiky and Kawsar Maruf, who worked at the famed Gramercy Tavern in New York City, have started a class action lawsuit against the defendants alleging the restaurant failed to pay them proper wages.

Danny Meyer, who is known as much for instituting no-tipping policies in some of his restaurants as he is for the quality of his food, has been accused of numerous wage-hour violations.

New York City Busboys Seek to Recover Unpaid Wages in New York City

Siddiky and Maruf were paid $5.00 per hour which is the minimum wage for tipped employees. The plaintiffs claim that, because they were required to pool their tips, they were entitled to earn $8.75 per hour, which was the full minimum wage amount at that time. The plaintiffs allege that the defendants required tipped workers to pool their tips and even share them with workers who performed non-tipped duties.

The complaint further alleges that for private events, Gramercy improperly withheld gratuities paid by customers. The Plaintiffs claim that it was the custom of the defendants to add 20% to every bill for a private event. The charge was allegedly called a “service charge” and Siddiky and Maruf claim that defendants never advised or led customers to believe that it was not a gratuity.

Employees in New York are Entitled to all Gratuities

Under NY state regulations, an additional charge on a bill is presumed to be a gratuity unless it is made clear to the customer that it is not. Gratuities belong to employees. New York Labor law states, “No employer or his agent or an officer or agent of any corporation or any other person shall demand or accept, directly or indirectly, any part of the gratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee”

Siddiky and Maruf allege that the gratuities withheld by the defendants on these occasions belong to the employees. They seek to recover unpaid wages, unpaid gratuities and liquidated damages.

Changing Tip Policies in New York City – What Rights do Employees Have?

The outcome of this case will be especially interesting in light of the number of restaurants following in Danny Meyer’s footsteps and experimenting with no-tipping policies. Do restaurants have to notify their customers of the policies? What if customers leave gratuities anyway? Are the restaurants obligated to turn the money over to the employees? How will no-tipping policies affect minimum wage calculations?

The answers may not be clear, and issues will continue to arise as more Long Island and New York restaurants try new payment models.

If you think you are entitled to unpaid wages or gratuities, you may wish to speak with an attorney to find out what you can do to remedy the situation. Feel free to contact Leeds Brown Law, P.C. and let us use our experience to help you recover any money to which you are entitled. Call us for more information about your workplace rights. Our New York City wage-hour and overtime pay lawyers are here twenty four hours a day.



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