Server accuses restaurant of tip appropriation, FLSA violations

DMNO LLC, d/b/a Doris Metropolitan, a restaurant in New Orleans was sued in a collection action on March 31, 2016 by James Black, et al, individually and on behalf of those similarly situated, in U.S. District Court for the Eastern District of Louisiana alleging violations of the Fair Labor Standards Act (FLSA). (See Black et al v. DMNO, LLC et al, U.S. District Court for the Eastern District of Louisiana Case number 2:16-cv-02708).

According to the complaint, it has been alleged that Doris was engaging in wage theft and willful violations of the FLSA when it appropriated a percentage of servers’ tips in order to subsidize managers’ salaries. Furthermore, it is also alleged that the defendant paid only $2.13 per hour to its servers and took a tip credit from customer tips to satisfy the required $7.25 minimum wage.

Louisiana follows the federal tip credit rules maintaining $7.25 per hour as the minimum wage. In most of the states in the United States, if an employee earns enough through the tips, then the employer is not required to pay the whole of minimum wage as set in the state law or the federal law. Instead, the employer is only required to pay a minimum of $2.13 an hour and the rest can be adjusted against the tips the employee receives. Hence, tip credit is the amount the employer does not have to pay after deducting $2.13 from the minimum wage that is required to be paid. However, if the employee does not earn at least $5.12 an hour in tips, the employer must pay the difference. See Groover v. Lafitte's Boudoir, Inc., 162 So. 3d 1184 [2015].

In Black et al v. DMNO, LLC et al, defendants alleged that the restaurant servers were required to “tip out” 10 percent of their credit card tips to managers and 25 percent of the tips to server assistants. Moreover, the cash tips were also irresponsibly and illegally distributed.

Additionally, Black also alleged that Doris failed to pay to tipped employees minimum wages for hours worked where there was no opportunity to earn tips and also refused to pay overtime to employees. The complaint also mentions about Shannon McSwain, another restaurant server who regularly worked more than 40 hours a week but was never paid overtime.

As stated in the complaint, plaintiffs have sought wages and/or tips owed to them, all allowable damages under the FLSA, including liquidated damages as well as all cost incurred by this suit, plus any other rewards deemed just by the court. They have also asked leave to amend the case for any future claims that may arise.

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