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Batali’s employees rake in millions in belated tip income

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in Compensation and Benefits,Employment Law,Human Resources

Manhattan celebrity chef Mario Batali has agreed to a $5.25 million settlement with waiters, bartenders, busboys and other floor staff at several of his restaurants.

In 2010, the employees sued the famed restaurateur, claiming that since 2004, Batali had routinely de­­ducted between 4% and 5% of wine sales from their tip pools to cover what management termed “wine research” and “broken glasses.” They alleged the diverted tip income went straight into the house’s pocket.

Employees at Batali’s Manhattan restaurants Babbo, Otto, Casa Mono, Bar Jamón, Esca, Lupa and Del Posto, along with Tarry Lodge in Port Chester, claimed the practice violated the Fair Labor Standards Act (FLSA).

Approximately 1,100 current and former employees will split the settlement funds.

Tip: Think twice before getting creative with employees’ gratuities. Both the FLSA and the New York Hospitality Industry Wage Order are complicated statutes that prompt lots of lawsuits.

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{ 1 commentsῂ read them below or add one }

Shaun July 10, 2012 at 7:31 pm

Here’s a better “tip” for any owner or manager of a restaurant: Stealing your employees tips is not the way to make a slightly higher profit. It is low down and dirty to steal from the people you hire at a lower wage than most businesses. Shame on you for even thinking about it.
This is a rampant practice in restaurants, hotels, and country clubs. All waiters, bartenders, bussers, et al should be very, very weary of any tip pool. There is no way to track how much money goes into it and it is a great temptation for someone who does know to dip into it. I have seen it over and over again.

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