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Settlement In Overtime Pay Suit Against TGI Friday’s

NEW YORK — The plaintiffs in an overtime lawsuit filed against TGI Friday’s in New York have agreed to settle their collective action suit against their former employer for violations of the Fair Labor Standards Act (FLSA). The company will pay the nine former workers representing the class between $1,900 and $48,000 each, for a total settlement amount of $225,000. The restaurant chain also agreed to pay the workers’ attorneys’ fees, but the settlement did not include any admission of guilt by the company for paying employees below the minimum wage.

Tipped Minimum Wage

According to the Wage and Hour Division of the U.S. Department of Labor, an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

Additionally, there are several states that require employers to pay workers above the federal tipped minimum wage. In New York, which is the venue of the class action against TGI Friday’s, employers are required to pay $3.75 an hour in direct wages. However, by December 31, 2015, the New York Labor Commissioner ordered that the tipped minimum wage be raised to $7.50 for all tipped workers. He also ordered a study to do away with the tipped minimum wage altogether and for all minimum-wage workers to make the same amount.

Requirements for Dual Jobs and Tipped Minimum Wages

The plaintiffs in this case allege that they were paid below minimum wage while doing work for which they were not given tips. Under FLSA, when an employee does work in both a tipped and a non-tipped occupation for one employer, such as an employee who does work as both a maintenance worker and a waiter in a restaurant, the tip credit is available only for the hours spent by the employee in the tipped occupation. FLSA permits an employer to take the tip credit for some time that the tipped employee spends in duties related to the tipped occupation, even though those duties are not by themselves directed towards producing tips.  For example, a waiter who spends some time cleaning and setting tables is considered to be engaged in a tipped occupation even though these duties are not tip producing. However, where a tipped employee spends a substantial amount of time (more than 20 percent in the workweek) performing related duties, no tip credit may be given for the time spent in such duties.

If you or someone you know is not being paid the federal minimum wage as a tipped or a non-tipped employee, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing so it is important that you call our experienced attorneys today.

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