Massachusetts Employment Law: Wage Violations Alleged at Restaurant Chains

The parent company for the major chain restaurants of Olive Garden, Red Lobster, Longhorn Steakhouse and others, is facing allegations of wage violations. waiterwithtray.jpg

It’s not the first time that the company, Darden Restaurants, has been the target of these allegations. In fact, the U.S. Department of labor’s Wage and Hour Division fined the company twice in 2011, saying employees at Red Lobster and the Olive Garden were made to work off-the-clock. Similar suits are pending.

The company employs some 180,000 people in about 2,000 restaurants.

Our Boston employment lawyers have represented both employees and businesses in these types of matters. While certain labor laws are clearly defined, others may result in areas of gray. It’s important that both businesses and employees be educated on their rights and potential options for dealing with violations.

The Fair Labor Standards Act, a federal law, lays bare the foundation for fair pay. The minimum wage in the U.S. right now is $7.25 an hour. in Massachusetts it’s more, $8 an hour, the highest rate in the country.

For tipped employees, it’s a little different. Tipped employees are those who are classified as receiving more than $30 each month in tips. These wages are considered the property of the employee, and the business is not allowed to use those tips for any reason other than a credit against its minimum wage obligation to the employee. Companies are currently required to pay tipped employees a minimum of $2.13 an hour.

The FLSA specifically addresses “dual jobs.” This is when an employee does both tipped and non-tipped work. What the law says is that if a person works as, say, both a waitperson and a maintenance person, the employer has to be careful.

The example given is that a server who spends some of the time cleaning up or setting tables or washing glasses or rolling silverware is still considered to be working in a “tipped occupation,” even though those tasks don’t actually generate any tips.

However, if the employee spends a “substantial” amount of time taking care of those non-tip related duties, then employers can’t claim that tip credit during those hours – meaning they would have to pay the full minimum wage during that time. “Substantial” is defined as in excess of 20 hours each week.

These issues are the center of the current case.

The lawsuit, filed in federal court in Florida, seeks potentially tens of millions of dollars in back pay, punitive damages, interest and attorneys fees.

Among the specific claims being made:

  • That employees were required to work over their allotted 40 hours without being paid time-and-a-half as required by law;
  • That tipped employees were required to roll silverware, vacuum, refill salt shakers and conduct other side work that went beyond the 20 percent threshold;
  • That servers who arrived for their scheduled shift were not allowed to clock in for work until customers arrived. Some also allege they were forced to clock out and continue working without pay.

Since this case is being filed as a class action, it’s expected at least 1,000 individuals will join the suit, though many more are likely eligible.

Having represented both businesses and employees in similar matters, we are well-qualified to understand the issues and will fight aggressively for your best possible outcome. Consulting with a law firm when setting your pay structure can help you best determine your obligations as an employer and stay on the right side of the law.

The Brown Law Firm, LLC, has offices in Belmont and Boston. For a free and confidential consultation, call 617-489-0817 or contact us online.

Additional Resources:
Darden Restaurants hit with lawsuit over wages, Staff Report, Reuters

More Blog Entries:
Boston Business Attorneys Urge Legal Review of Commercial Land Transaction in Massachusetts, Aug. 30, 2012, Boston Employment Lawyer Blog

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