Five employees working in the front rooms of a French bistro in Philadelphia have filed a class action suit with the U.S. District Court for the Eastern District of Pennsylvania against the restaurant under the Fair Labor Standards Act, claiming they were not fully compensated because of a policy that deducted money from their tips to pay for credit card fees.
The lead plaintiffs filed the complaint on behalf of current and past employees of the Caribou Cafe who worked as waiters, bartenders or hosts, claiming that the restaurant unlawfully deducted money from the employees gratuities.
According to the complaint, state and federal statutes allow employers to utilize a credit to pay tipped employees a wage less than the minimum wage, which is $7.25 in Pennsylvania. The tip credit is defined as a legally permitted portion of the statutory minimum wage that an employer is excused from paying because its tipped employees have earned a certain amount of money in tips or gratuities.
Under the FLSA, an employer may claim a $5.12 per hour credit from a tipped employee’s minimum wage, then required to pay the remaining $2.13 per hour to the employee. If the amount of tips an employee receives and fixed hourly rate is less than the minimum wage, an employer is obligated to pay an employee for the shortfall. If an employee receives tips in excess of the minimum wage, an employer is not entitled to an additional credit.
According to the complaint, management at the Caribou Cafe regularly required the employees to deduct 3 percent from all gratuities before distributing the money to the front staff.
The claim cites language from the Philadelphia Gratuity Protection Bill, which says, "An employer that permits patrons to pay gratuities by credit card shall pay employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deduction for any credit card payment processing fees or costs that may be charged to the employer by the credit card company."
The class action is open to former employees who worked for the Caribou Cafe for the past three years. The complaint says there are at least 50 potential class members who were not properly compensated.
The plaintiffs are represented by Lance Geren of Freedman & Lorry in Philadelphia.
The federal case ID is 2:14-cv-07187-WY.