For Fine Dining Sector, Tip Pools Can Be Legal Trap

July 1, 2014 – In The News
Carolyn D. Richmond was quoted in Law360's article, "For Fine Dining Sector, Tip Pools Can Be Legal." Full text can be found in the July 1, 2014, issue, but a synopsis is below.

With the recent spike of lawsuits against restaurants concerning tipping law violations, employees with managerial duties are most at risk of facing litigation or Department of Labor audits in the coming future.

Carolyn Richmond, co-chair of Fox Rothschild's hospitality practice based in New York City, comments that while restaurants tend to hold many positions in the tip, "they're taking the gamble now that, under the law, they will pass the test."

She further explains that some restaurants are reducing employees' nontipped duties, such as inventories and handling vendors, to one day a week and not including that employee in the tip pool for the day.

To close, Richmond states that tipping laws are "a catch-22 for a lot of restaurants." Looking forward, many hope that New York's next wage order clarification will facilitate this problem.