Sheehan & Associates, P.L.C.

Michigan restaurant company facing wage suit by former waitress

The owner of a group of Michigan restaurants is facing a federal lawsuit for allegedly not paying tipped employees minimum wage. The Detroit-based company that owns over a dozen Buffalo Wild Wings restaurants in Michigan is the defendant in the suit brought by a former waitress.

According to the plaintiff, tipped employees making less than minimum wage are required to do tasks belonging to employees who are paid the state-mandated minimum wage. These include cleaning and washing dishes.

The plaintiff and her attorney want to turn their suit into a class-action suit open to all tipped employees of Michigan locations of Buffalo Wild Wings owned by Diversified Restaurant Holdings, headquartered in Southfield. These include seven locations in metro Detroit.

The plaintiff's attorney says the suit addresses a problem faced by tipped employees in restaurants everywhere. He says they are paid less than minimum wage while being required to "perform…significant amounts of non-tip producing duties." This, he says, "prevents them from earning the legally mandated minimum wage." The minimum wage in Michigan is $7.40 per hour, but tipped employees who regularly earn more than $30 in tips each month only have to be paid $2.65 per hour.

The claims in the suit, which have been denied by Diversified Restaurant Holdings, have split people involved in the restaurant industry. A Michigan spokesman for the Restaurant Opportunity Center, which is trying to eliminate the separate minimum wage for tipped employees, says the plaintiff's case is the rule rather than the exception.

The Michigan Restaurant Association, however, says the median hourly wage for these employees actually works out to $16.00 an hour when tips are factored in. He says that the effort to eliminate a lower minimum wage for tipped Michigan employees is "the wrong plan at the wrong time for Michigan's fragile economy." He claims it will raise prices for consumers, decrease jobs for restaurant workers and "put many restaurants out of business."

Businesses need to ensure that they are complying with minimum wage laws for tipped and non-tipped employees. This means not doing anything to prevent workers in either of these groups from earning at least the minimum wage. Failure to do so can result in significant employment litigation costs, not to mention negative publicity. It is essential that companies consult with their legal teams to help ensure that they are in full compliance with Michigan wage laws.

Source: MLive Media Group, "Buffalo Wild Wings owners accused in lawsuit of stiffing waitstaff, others on minimum wage pay" Gary Ridley, Apr. 25, 2014

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