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Apr 05 2013

WAGE, HOUR AND TIP LAWSUITS ARE CRIPPLING THE NY RESTAURANT INDUSTRY

Published by at 2:32 pm under Handling Tips,Taxes,Tip Sharing,Wages

Strict compliance with the law in this area is difficult given the myriad of laws that pertain to employee’s wages and tips in the restaurant industry. As such, some NY lawyers have taken aim at the industry and, as a result, eateries have paid out over $70 million in settlements over wage and tip complaints in the past few years alone.

The city’s biggest names, including Nobu, Jean Georges, Sparks, Mesa Grill, Pastis, Balthazar, BLT, and the ‘21’ club have all faced similar lawsuits and have forked over millions of dollars as a result. Others have been forced to close as a result of such lawsuits, including Geoffrey Zakarian’s Country and Chris Cannon’s Alto and Convivio.

At least one of NYC’s top restaurateurs has had enough. Joe Bastianich, co-owner of Eataly, Del Posto and Babbo, who has been sued twice in NY with wage and tip complaints, vowed in 2011 that he will no longer be opening any more restaurants in this state. . . and he hasn’t. Rather he has since opened three establishments in Chicago and California giving those states the substantial tax revenue and 1000+ jobs created by the establishments. This loss of revenue and job creation is not something that even our relatively wealthy city can afford.

So what’s the solution? Comply with the law and you won’t have anything to worry about. If you are not positive that you are presently in compliance, consult with an experienced attorney immediately and have them review your wage and tip policies and procedures. Sure they will charge you for you the service . . .but you’ll get it right going forward and avoid the extremely costly fate of getting sued for a wage and/or tip violation.

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