Yesterday, a federal judge rejected PF Chang’s request to dismiss a lawsuit brought by PF Chang’s servers seeking to recover unpaid minimum wage for time spent performing related but untipped work, such as rolling silverware, refilling condiment jars, and cleaning tables and chairs. The servers, represented by Nichols Kaster attorneys Reena I. Desai and Jay E. Eidsness, and Ben Davis from the Law Offices of Peter T. Nicholl, work in states that have a “tip-credit,” which allows the restaurant to pay its tipped employees a sub-minimum hourly wage and to make up the difference using the employees’ tips. For over 30 years, the Department of Labor consistently interpreted the relevant regulations to require employers to pay the full minimum wage for time tipped employees worked performing related, but untipped duties, if such untipped duties exceeded 20% of their work time. This interpretation was the basis of this lawsuit filed in July 2018. But in November 2018, the current administration’s Department of Labor drastically changed its interpretation, and instead, provided that employers can pay the sub-minimum hourly wage for all related, untipped work no matter how much time a tipped employee spends performing the untipped work (i.e., no limitation), so long as it is performed alongside tipped duties such as serving. The Court refused to follow the Department of Labor’s new interpretation and determined it was unreasonable, conflicts with the relevant regulations, and abandons decades of consistent agency policy without explanation.
This ruling is a significant victory in the continued fight to hold restaurants accountable for practices that deprive tipped employees of wages they are lawfully entitled to receive. The case is Belt et al. v. P.F. Chang's China Bistro Inc., case number 18-cv-03831 in the U.S. District Court for the Eastern District of Pennsylvania.