Georgia restaurant owners know how difficult it can be to own a business in the food services industry. Numerous issues require daily attention from owners and managers in order to avoid losing customers, which are undoubtedly the lifeblood of any successful restaurant. One issue that can be difficult at times is the potential for a wage and hour complaint due to laws that apply to the compensation of restaurant workers.
Numerous Labor Department and IRS rules apply to how wait and bar staff are paid. It is easy for restaurant owners and managers to get confused. However, the Labor Department does not believe that one restaurant chain was confused when it allegedly violated wage and hour laws.
Chickie’s & Pete’s, a sports bar chain in Pennsylvania and New Jersey, was accused of several violations including underpaying employees, keeping a percentage of tips and not paying overtime. The pool of employees affected is nearly 1,159. Servers are to be paid a minimum of $2.13 an hour, but when tips do not bring an employee up to the federal minimum wage (currently $7.25), the employer is obligated to supplement that hourly wage to bring it up to that level. Federal law also prohibits the establishment from keeping a portion of the tips earned by wait and bar staff, and time-and-a-half is to be paid for any hours over 40 each week.
Instead of spending time and money on what could be a lengthy court battle, the chain of sports bars opted to settle the wage and hour complaint for $6.8 million in back pay to the affected servers. Georgia business owners understand that sometimes it is necessary to conduct an assessment to determine whether the cost of going to court is worth it or if settling would best serve the business. These considerations are not just about money — goodwill is an important part of any business, and that loss could hurt a business more than losing any monies.
Source: The New York Times, Sports Bar Chain Agrees to Pay $6.8 Million for Violating Wage Laws, Steven Greenhouse, Feb. 20, 2014