Some Facebook friends led by such pains in the asses as Henry Alexander Dumas and Susan Anton regularly prod me to write about various wrongdoings by evil doers. The reported settlement by restauranteur Mario Batali and his partners over a wage/tip dispute is their latest peeve for Steve to explore. It seems that workers at Mario’s restaurants have been forced to share their tips with sommeliers – and that isn’t allowed. Other infractions, like choosing not to pay employees a required extra hour of pay after the 10th hour of labor, were also cited. Mr. Batali is reportedly settling for $5.25 million.That’s a whole lot of jars of Mario Batali Marinara Pasta Sauce. This settlement is a wake-up call to the industry. The bad practices of this crew regarding employers encroaching on employee tip pools is merely the tip of the industry iceberg. This huge precedent has law firms salivating on the next group of former or current disgruntled employees to step up and cry foul. I believe that a great deal of the business is not in compliance with current law. I’m not going to name names as I am friends with most, but I will list the most common "misunderstandings" and the corresponding New York State Labor Department regulation.
(a) Tip sharing is the practice by which a directly tipped employee gives a portion of his or her tips to another service employee or food service worker who participated in providing service to customers and keeps the balance.(b) Tip pooling is the practice by which the tip earnings of directly tipped employees are intermingled in a common pool and then redistributed among directly and indirectly tipped employees.(c) Directly tipped employees are those who receive tips from patrons or customers without any intermediary between the patron or customer and the employee.(d) Indirectly tipped employees are those employees who, without receiving direct tips, are eligible to receive shared tips or to receive distributions from a tip pool.(e) Eligibility of employees to receive shared tips, or to receive distributions from a tip pool, shall be based upon duties and not titles. Eligible employees must perform, or assist in performing, personal service to patrons at a level that is a principal and regular part of their duties and is not merely occasional or incidental. Examples of eligible occupations include:(1) wait staff; (2) counter personnel who serve food or beverages to customers; (3) bus persons; (4) bartenders; (5) service bartenders; (6) barbacks; (7) food runners; (8) captains who provide direct food service to customers; and (9) hosts who greet and seat guest
146-2.20. Tips charged on credit cards. When tips are charged on credit cards, an employer is not required to pay the employee’s pro-rated share of the service charge taken by the credit card company for the processing of the tip. The employer must return to the employee the full amount of the tip charged on the credit card, minus the pro-rated portion of the tip taken by the credit card company.Example: The bill totals $100.00 exactly. The customer leaves, on their credit card, the $100.00 payment of the bill, as well as a $20.00 tip. Both the tip and the bill must be processed through a credit card company which charges a 5% fee on all transactions. The total charge levied by the credit card company on the $120.00 charge is $6.00. Of that $6.00, $5.00 is for the bill (5% of $100) and $1.00 is for the tip (5% of $20). The employer must provide the employee $19, which represents the $20 tip minus $1.00 pro- rated employee’s portion of the surcharge).
(a) Employers may not make any deductions from wages, except for credits authorized in this Part and deductions authorized or required by law, such as for social security and income taxes. Some examples of prohibited deductions are:(1) deductions for spoilage or breakage; (2) deductions because of non-payment by a customer; (3) deductions for cash shortages or losses; and (4) fines or penalties for lateness, misconduct, or quitting by an employee without notice.
146-2.18. Charge purported to be a gratuity or tip.Section 196-d of the New York State Labor Law prohibits employers from demanding, accepting, or retaining, directly or indirectly, any part of an employee’s gratuity or any charge purported to be a gratuity.(a) A charge purported to be a gratuity must be distributed in full as gratuities to the service employees or food service workers who provided the service.(b) There shall be a rebuttable presumption that any charge in addition to charges for food, beverage, lodging, and other specified materials or services, including but not limited to any charge for “service” or “food service,” is a charge purported to be a gratuity.