Here's how not to deal with skyrocketing labor costs: shaving time off of paychecks, letting uniform expenses go unreimbursed, and skipping out on shift breaks.
— Erika Adams
From the chains to the independents, wage violations run rampant in the industry. Each month, we’ll be highlighting the bad actors, calling out settlement decisions, and watching how often restaurants return to the roundup.
In this inaugural edition, Pret A Manger settles its second wage theft lawsuit in four years, True Food Kitchen pays up for running its overworked staffers ragged, and an independent restaurant in New York City gets called out for alleged tip credit violations.
Pret a Manger
What Happened: New York workers sued Pret A Manger (for the second time in four years!) over wage violations. This time, workers accused the company of skimping on pay by rounding hours down when employees reported time worked.
The Result: Pret A Manger settled the case for $875,000, paid out to the affected workers.
Skift Table Take: Pret A Manger clearly didn’t learn from its mistakes four years ago, when it doled out $915,000 to New York workers cheated out of wages at the time. It’s a terrible look for the company, which was just acquired by JAB Holdings earlier this year. At the time of the acquisition, Pret CEO Clive Schlee announced that every one of Pret’s 12,000 employees would get a $1,275 payout after the deal went through. You know what would look even better? Paying Pret’s employees fairly the first time around instead of broadcasting deal bonuses on Twitter.
True Food Kitchen
What Happened: California employees of True Food Kitchen, an Oprah-backed chain with several dozen locations scattered across the U.S., sued the company over multiple wage violations ranging from nonexistent meal breaks to off-the-clock side work.
The Result: True Food Kitchen and the employees have agreed to settle the case for $900,000, pending court approval.
Skift Table Take: It’s telling that in documents filed as part of the proceedings, the workers’ lawyers preface the list of wage violations by calling them out as “common occurrences in today’s workplace,” given that labor budgets are so tight in the industry. At True Food Kitchen, general managers’ salaries are tied to the performance of their restaurants. If labor costs go up, that cuts into the restaurant’s profit margin, which then cuts into the general manager’s pay.
In this company’s case, that formula led to managers chronically understaffing restaurants, forcing servers to forgo breaks in order to keep the dining room running, and stay after they had clocked out in order to finish up side work that was impossible to complete on their shift. On top of that, employees routinely had to pay for uniform replacements and some paid to download the app associated with the labor management tool that the company used (HotSchedules) without reimbursement. (While federal labor laws don’t require employers to pay for their employees’ direct business expenses, California state law does.)
What’s most egregious here is that these are common occurrences in the industry. It’s not hard to imagine that plenty of restaurant workers have been asked to stay just a couple minutes longer to finish rolling silverware even though they’ve already clocked out, or perhaps an employee didn’t want to rock the boat by asking for reimbursement on a $3 HotSchedules app download. It’s good to see True Food Kitchen’s workers finally come out on top after years of litigation.
Read PDF below.
One to Watch
One if by Land, Two if by Sea
What Happened: One if by Land employees allege that the New York City restaurant (a famous wedding and engagement hotspot) is guilty of shaving time off of paychecks, improper use of the tip credit, and unreimbursed uniform expenses, among other violations.
The Result: No resolution yet, although the parties approached and then backed away from settlement discussions this week according to court documents.
Skift Table Take: Not only does this case name the same issues that Pret A Manger and True Food Kitchen workers were dealing with (time shaving, unpaid work expenses) but it also engages multiple wage violations with regards to the tip credit. The named plaintiffs, former employees who had worked as food runners, bussers, and a former sommelier who had been with the restaurant for a decade, allege that they worked 12 to 14 hour shifts, often with no breaks and improperly calculated overtime pay. They also claim that they were paid a tip credit rate for all hours worked, even when they were allocating more than 20 percent of their shift to untipped work.
The alleged complaints demonstrate how the tip credit can be manipulated among restaurant management to pay employees improperly (in One if by Land’s case, the plaintiffs allege that this went on for years). Multiple state governments are currently debating whether or not to keep the tip credit: Washington D.C. citizens voted to get rid of the credit only to have the decision overturned by city council members, then a bartender sued the Board of Elections. New York Governor Andrew Cuomo is currently considering whether or not to touch the regulation.
True Food Kitchen Settlement
One if By Land Complaint