HARTFORD, CT — A hundred restaurant owners packed a legislative hearing room Thursday to hear about draft legislation that would limit the ability of servers and bartenders to bring class action lawsuits against them.
The draft legislation would require the state Department of Labor to create new regulations and rules regarding how restaurants segregate the hours of service and non-service work, such as rolling silverware and filling salt shakers.
More than a dozen class action lawsuits have been filed, mostly by one law firm against a number of restaurants for not appropriately keeping track of servers’ hours based on Department of Labor guidance.
Barry Jessurun is one of those restaurant owners being sued by a former server.
Jessurun said for many years restaurants had been following the 80/20 rule the Department of Labor outlined on page 13 of its guidance to the industry.
That guidance, which has been removed from the DOL’s website, essentially said restaurants can pay their employees the lower tipped credit of $6.38 an hour for servers and $8.38 an hour for bartenders if the non-service duties “compromise 20% or less of the service persons total working time on a particular shift.”
“Restaurants across the state are being accused of not segregating time to tipped servers while performing non-service duties,” Jessurun said. “While the regulatory and enforcement agency gave the industry advice to the contrary.”
Sal Luciano, head of the AFL-CIO, pointed to a poster of the disclaimer language attached to that guidance during a separate press conference. Labor opposes the draft legislation because while it would allow an individual server to bring a lawsuit it makes it harder for them to get a certification for a class action lawsuit. Also it makes it harder for an individual server to get attorneys’ fees paid through the courts.
“How can a server spend a few thousand dollars on attorney fees and then not get the attorneys’ fees trying to recover $100 or $200?” Luciano asked.
Rep. Michael Winkler, D-Vernon, said this type of “wage theft” has been going on forever, but the workers just figured out how to organize class actions. He said no attorney is going to take an individual wage case to recover a few hundred dollars because the contingency is not high enough.
Ryan O’Donnell, the attorney for the Connecticut Restaurant Association, said the legislation doesn’t prevent class actions, but makes them much harder to pursue, a safeguard to make sure “restaurant owners aren’t crushed by a litigious process from the beginning.”
The current regulations are based on a law that’s been on the books since the 1950s. That law requires restaurants to keep track of service and non-service work.
The Labor Department supports the legislation.
“We are in firm belief that determining the amount of minimum wage for workers in the restaurant industry can be fairly addressed by making revisions to existing regulations,” Department of Labor Commissioner Kurt Westby told the legislature’s Labor and Judiciary Committees Thursday.
Westby said they would consult with “interested stakeholders” before writing those regulations.
Sen. Gary Winfield, D-New Haven, asked why the department is supporting legislation that doesn’t impact how it operates internally regarding wage and hour complaints but will change how servers can pursue class action lawsuits against these restaurant owners.
The lawsuits prompted the Connecticut Restaurant Association to lobby for the change. Both chambers of the General Assembly unanimously passed legislation that would have prohibited the class actions. It was vetoed by Gov. Ned Lamont. The draft legislation discussed at the public hearing Thursday was a compromise worked on by lawmakers and Lamont’s administration.
Stephen Lattanzio, an attorney at the labor department, told Winfield that the class actions and the court cases are not within the purview of the Connecticut Labor Department. Lattanzio said the department supports the change in legislation because it will get to a point where the internal enforcement policy of the agency mirrors what the regulation will actually say.
Officials said of the 4,000 wage and hours claims made annually to the department, over the last year, 10 concerned segregation of wages with a restaurant.
Rep. Robyn Porter, D-New Haven, said there would be a lot more claims if not for fear of retaliation.
Several lawmakers asked how the labor department plans to include an unorganized group of workers like servers and bartenders in their regulatory process.
Westby assured lawmakers they would be at the table.
It’s unclear when a special session would be scheduled to vote on the legislation.
Sen. John Kissel, R-Enfield, pointed out the restaurant owners are being sued for more than the segregation of service-related and non-service work.
“It seems like there’s a little bit of a cottage industry out there,” Kissel said.
Chicago Sam’s restaurant chain in Kissel’s district just lost a lawsuit filed by a server, however, it wasn’t lost on the issue of segregation of service and non-service related duties.
The restaurant, according to summary judgment, failed to record on a weekly basis “the amount received in gratuities claimed as a credit for part of the minimum fair wage.” Nor did it “obtain weekly a statement signed by the employee attesting that he has received in gratuities the amount claimed as credit for part of the minimum fair wage.”
Essentially, the court documents say the restaurant failed to have their servers sign for their checks and declare weekly how much was claimed in tipped wages even though the servers used their personal identification number to log in to the respective computer systems at each Chicago Sam’s to declare all of their tips at the end of each and every shift.
The issue of how servers receive their checks and vouch for their tips was not part of the discussion Thursday.