Wage-Violation Lawsuits By Restaurant Workers Featured by NJHRA
September 11, 2015
Corporate Labor Attorney Gary S. Young authors article titled, “Wage-Violation Lawsuits By Restaurant Workers,” is featured by the New Jersey Restaurant Association.
The decade-long, steadily increasing rise of wage-violation lawsuits by restaurant workers against their employers that has been making headlines was recently discussed in an article written by Scarinci Hollenbeck partner Gary Young, published in the New Jersey Restaurant and Hospitality Association’s (NJHRA’s) newsletter. In this article, Mr. Young, a prominent business and labor law attorney, discusses how wage violation lawsuits have been on the rise for more than a decade and that the trend towards such suits increases every year.
“Wage and hour laws are inherently complex, which is why many employers fail to understand and properly apply them,” Mr. Young explained. He continued, “By way of just one example, the laws concerning tipped employees are of particular concern to employers,” he continued. “Restaurants often hire ‘tipped employees’ – and if they fail to legally compensate such employees in any material aspect, this can potentially cause the whole pay regime to fail and expose the employer to a far greater downside than may be understood.” He explained how this aspect of the law gives plaintiff’s lawyers the incentive to sue restaurants.
“The law in New Jersey is that if tips make up the difference in pay to meet the minimum wage and a compliance failure is found, the payment owed by the employer to all affected tipped employees escalates from $2.13/hour to the current minimum wage of $8.38.” This, of course, could have devastating financial consequences for the employer. In addition, New Jersey law allows plaintiffs to sue for back pay if the non-compliance is found to be intentional. If penalties and attorneys’ fees were added on, the total damages could be catastrophic. Not only would the restaurant be exposed to liability, but supervisors who participated in decisions leading to such pay failures could be held personally liable.
According to Mr. Young, other common employer breaches include, but are by no means limited to, failing to keep track of all hours worked working “off the clock” and the misclassification of employees as independent contractors. He emphasized that “The many damaging impacts of non-compliance underscore the fact that employers need to know the law and properly apply it – and that ignorance of the law is no excuse.”