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“Side Work” Lawsuits Brought by Restaurant Employees on the Rise

Ruby Tuesday is the latest restaurant chain to face a “side work” class-action lawsuit brought by employees who allege that they are underpaid pursuant to federal regulations. The suit against Ruby Tuesday involves thousands of workers at 658 restaurants nationwide who receive a tip credit wage while performing side work such as sweeping floors, washing dishes, cleaning and setting tables, toasting bread, and making coffee. This case follows similar class actions against Darden Restaurants, Inc. and Applebee’s and signals the escalation of a growing employment litigation trend.

Federal regulations provide that servers and bartenders may spend up to 20 percent of their time doing non-tipped side work, but must be paid at a rate of $7.25 per hour after that (i.e., the federal minimum wage). According to the U.S. Department of Labor’s Wage and Hour Division, between 2013 and 2015, investigators found tip credit violations in over 1,500 cases, resulting in nearly $15.5 million in back wages. Not surprisingly, class action lawsuits have followed.

Nationwide, class-action lawsuits face certain challenges, as the law is not the same in every state. While the federal standard is the 20 percent rule, other states have their own formula. In New York, for example, if the side work is over two hours, or more than 20 percent of the shift, then the employer cannot take a tip credit for the entire day.

There are also challenges with respect to establishing credibility, as most allegations will be a he-said/she-said type of affair with respect to the amount of time worked. Likewise, the 20 percent rule can be difficult to apply and measure because tipped work and untipped work can intermingle throughout the day. Further, absent some unifying policy, each restaurant location will likely be managed differently with distinct “side work” expectations (i.e., 658 different Ruby Tuesday restaurants may not approach “side work” identically).

Regardless of the viability of class action lawsuits, their dramatic increase means that restaurants must be diligent in reviewing the schedules and tasks of their tipped employees to ensure that they are complying with federal, state and local rules. 

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.