New York's top restaurants plagued by tip trouble

By Christine Kearney Thu Sep 18, 10:05 PM ET

NEW YORK (Reuters) - Seasoned travelers know that waiters in the United States expect tips of 15 to 20 percent -- $60 on a $300 dinner for two at one of New York's top restaurants.

What is less well known is that the money doesn't all go to the waiters and more lowly staff.

In lawsuits filed in the last three years, staff have accused dozens of New York restaurants, including many well-known ones, of stealing tips and cheating them out of wages.

Among those named in the suits are celebrity haunt Pastis; three New York restaurants co-owned by actor Robert De Niro in the global Nobu chain; Jean Georges -- which has three Michelin stars -- and other restaurants owned by French chef Jean-Georges Vongerichten; and hip hop star Jay Z's 40/40 Club.

Peruvian Ivan Arias said he was happy just to have a job when he came to New York and found himself working as a busboy at the Redeye Grill, an eatery in midtown Manhattan where eight of its signature "dancing shrimp" cost $39.

But Arias, 36, said he soon realized he was being cheated out of overtime, breaks and promotions, and denied a fair share of tips.

"The conditions were not OK. They did not pay me tips. They did not pay me overtime," Arias told Reuters.

In June, a New York judge approved the first payment in a settlement totaling $3.9 million for workers at the Redeye Grill and five other restaurants owned by the Fireman Hospitality Group.

As part of the settlement, Fireman agreed not to let managers share in tips.

A spokesperson for the company did not return a call seeking comment. A spokesman for the New York State Restaurant Association was not available for comment.

Carolyn Richmond, an attorney representing several restaurants, blamed decades-old workplace labor laws, as well as state and federal laws that do not clearly state who can share in tips and how they should be divided.

"It is a result of these antiquated laws and regulations that plaintiff class action lawyers have been able to swoop in and take advantage," she said.

CELEBRITY CHEF

Indeed, the suits, filed mainly by low-paid immigrants who work as dishwashers and busboys, has emboldened usually white front-of-house staff to file their own suits.

The restaurants have also accused a nonprofit group called the Restaurant Opportunities Center, which organized protests outside the Redeye Grill, of orchestrating a campaign based on unfounded accusations.

But an attorney for the center, Rekha Eanni, said the lawsuits show that poorly paid immigrants were losing their fear of speaking up.

"It's really significant that this is the first time -- this meaning in the past six or so years -- when workers are really coming forward," said Eanni.

Since the suit was filed against Fireman, dozens of similar ones followed. Some are still pending while others have settled.

Vongerichten has agreed to pay $1.75 million to eight waiters who filed suit on behalf of all staff at Jean Georges and four of his other New York restaurants, pending final approval by a judge.

And last year celebrated chef Daniel Boulud agreed to settle for an undisclosed amount with immigrant workers at his restaurant, Daniel. They accused the restaurant of promoting white French workers ahead of nonwhites.

Arias, married with a young daughter, now works as a busboy at Craftbar, an offshoot of one of the city's top restaurants, Craft. Whereas at the Redeye Grill he earned $400 for up to 60 hours a week, he now earns around $600 for 35 to 40 hours, he said.

"Now I am happy, with my tips, with my check, every time," he said.

Julio Anzures, who received a payout of $20,000 in a settlement with a restaurant owned by Smith and Wollensky in 2003, said conditions have improved since the lawsuits started.

"I feel good not about the money but about the change of conditions," said Anzures, who has since moved up from dish washer to line cook and who sends most of his money home to his family in Mexico. "After these campaigns there are now breaks and overtime."

But he and others say there is still abuse.

"The people that make the laws, they know what is happening in the industry," Anzures said. "They need to make more changes."

(Reporting by Christine Kearney; Editing by Daniel Trotta and Eddie Evans)