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An iconic New York City ice cream parlor, famous for holding the Guinness World Record for most expensive dessert (the $1,000 “Golden Opulence Sundae”) and most expensive hamburger (the $295 “Le Burger Extravagant”) and once offering a World Record $25,000 frozen hot chocolate, recently submitted a $975,000 settlement of a wage and hour collective action for approval.  Serendipity 3, which has been patronized by such luminaries as Marilyn Monroe, Andy Warhol, and Jacqueline Kennedy and was featured in the film Serendipity, was sued by thirty three of its servers and bussers over alleged federal and New York state wage and hour violations.  These included unpaid minimum wage and overtime, spread of hours pay, misappropriation of gratuities, failure to pay uniform maintenance costs, unlawful wage deductions, and more.  The settlement must now be approved by the Judge presiding over the case.

Among the unlawful conduct alleged were claims Serendipity 3 forced workers to spend at least 20% of their time performing non-tipped work  (while being paid at the lower tipped employee wage rate) and required them to share their tips with employees not entitled to tips.  The restaurant also allegedly required employees to work off-the-clock without compensation.  For example, one employee was allegedly required to fill out paperwork which sometimes took half an hour.  Other claims included allegations that Serendipity 3 did not pay the proper minimum wage for tipped employees, deducted from employees’ pay for customers who didn’t pay their bill, and required a uniform but failed to either pay for uniform maintenance or launder/maintain the uniforms.

This case should serve as a cautionary tale to all restaurant industry employers.  State and federal labor and employment laws are incredibly complex, and non-compliance can be very costly.  This is especially so in New York State, where the statute of limitations for employment law violations is six years.  In addition, fast-food restaurants in New York City must now contend with Fair Workweek legislation which strictly regulates when employees must get notice of their shifts, how changes to shift scheduling may be made, and more.  Now is a good time to consider conducting an HR Audit to identify potential issues before they become a problem.

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.