The number of wage and hour disputes for restaurant workers is on the rise. Cherry Hill employment lawyers comment that this has been a steady upward trend since 2005. On a nationwide basis, wage and hour disputes have doubled over the past decade and have nearly tripled in New York State since 2009 from 652 to 1,738.
A restauranteur can fall into many different variations of wage and hour pitfalls along the way. Oftentimes this is due to ignorance of the law, rather than bad intentions.
For example, an employer can mistakenly misclassify an employee as an “exempt” employee under “White Collar Exemptions,” or misclassify employees as independent contractors. Misclassification claims can then lead to ERISA (The Employee Retirement Income Security Act of 1974) violations if the restaurant maintained more than one employee benefit plan or violations under the Affordable Care Act.
Wage and Hour Violations and Tips
Most commonly, restauranteurs will mishandle the tip system that is in place in their restaurant. Many employers use a “tip-pooling” method, and therefore if one violation is found, this can set off a multitude of violations. This can become quite expensive where the state minimum wage requirements for employees who count on tips are much lower than the actual state minimum wage.
In New Jersey, for example, the state minimum wage for tipped employees is $2.13 when tips are expected to make up the difference between that wage and the state minimum wage. If 50 employees successfully sue and are owed the difference between the tipped wage and regular wage, this totals about $650,000 for one year. But employees can also seek back pay for up to three years and they can seek damages. The employer would also owe attorneys’ fees if the case was fully litigated. All in all, the employer would owe millions under that scenario. This is enough to put many restaurants out of business, therefore following wage and hour laws very closely can be key to any restaurant owner.
Additionally, employees must be vigilant in understanding the law that protects them if they feel as though the employer is not compensating them lawfully.
Cherry Hill Employment Lawyers at McOmber McOmber & Luber, P.C. Ensure That Employers Are Following Wage and Hour Laws
If you are in the restaurant industry, seek the counsel of experienced Cherry Hill employment lawyers at McOmber McOmber & Luber, P.C. P.C. to be sure you fully understand employee rights and employer responsibilities under the law. Our offices are in Marlton and Red Bank, New Jersey where we serve clients throughout the state. Call toll free at 888-396-0736 or at 856-985-9800, or contact us online.