Class Action Blog : Class Action Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz : Consumer fraud, Personal Injury

A few months ago we published a blog post about employees who are paid by the hour -- particularly low wage workers -- and who are often cheated by their employers.  We pointed out that hourly workers are routinely denied proper overtime pay and are often paid less than minimum wage according to a newly released study based on a survey of workers in New York, Los Angeles and Chicago.

But what about workers who are not being paid their tips, even though their employers are charging customers a mandatory gratuity for various services?  Unfortunately, many employees do not realize that they are entitled to receive all, or a significant portion, of gratuities charged by employers to their customers.

Indeed, there are millions of workers in the USA that rely on tips for most of their income, and there are well over two million businesses that rely on tipped employees.  According to recent statistics from the U.S. Department of Labor, food and beverage service-related workers held 6.5 million jobs in 2000 alone.  The U.S. Department of Labor estimates in a 2001 study that tips and gratuities may account for well over $5 billion per year being left on plates and tip trays and financed on credit cards.

But let's face facts.  Relying on customers' tips for your income is tough.  The average customer doesn't realize how difficult and hard the average waiter, waitress, hair dresser, concierge, cab driver, maitre de or bartender works for their money.  Dealing with and satisfying the general public is one of the most demanding jobs around.  Many, if not most, tipped employees have a tough time making ends meet.

So if your employer is withholding gratuities that you’ve earned, you may have a case under The Fair Labor Standards Act ("FLSA").  The Act mandates that gratuities earned by an employee but collected by an employer must be turned over to the hard working employee whom earned it.  If your employer is not doing so, you may have a basis to file a class action suit to recoup the tips earned by you and all other workers at your work site.  Employers who do not manage and properly account for the gratuities earned by their employees and who do not properly pay their employees tips that they have collected on behalf of their workers may in fact be violating the law.

If you believe that your employer is withholding gratuities that you’ve earned, please contact us to discuss your legal options.

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If you’re an employee with a 401k plan that has in it shares in the company you work for, and the executives of your company back-date their stock options -- thereby decreasing the value of your company’s shares and the value of your 401k plan -- do you have a right to sue for violations of the Employee Retirement Income Security Act (“ERISA”)?  Apparently you do, and many employees in this identical situation have done so.

Backdating takes place when executives change the award date of previously granted stock options in shares of their own company so that their securities are worth more -- sometimes tens of millions of dollars more.  For example, Monster Worldwide has at last put an end to a prolonged stock-option-backdating scandal that cost the company tens of millions of dollars and resulted in the criminal convictions of two former senior officials.  The New York based company agreed to pay $4.3 million to a group of employees who held Monster stock in their 401(k) plans.  These employees sued alleging violations of ERISA and contending they had bought shares in their 401k plans while their bosses -- Monster Worldwide executives -- made false disclosures about Monster's financial condition and illegally lined their pockets with back-dated stock option grants.

This boardroom version of creative writing took place at dozens of companies, including at Grand Theft Auto publisher Take-Two Interactive Software, Comverse Technology and Cablevision Systems, as well as many other companies based in Silicon Valley.

The practice seems to have been especially pervasive at Monster, where backdating options apparently went on for nearly a decade before being uncovered in 2006.  The Securities and Exchange Commission (“SEC”) filed civil fraud charges against the company's former chief executive, president, general counsel and controller.   In fact, Monster's former president, James Treacy, was convicted on criminal fraud charges and was sentenced to two years in prison.  And Monster's former general counsel, Myron Olesnykckyj, pleaded guilty to criminal fraud charges in 2007 and is scheduled to be sentenced in February, 2010.

If you are an employee with a 401k plan that has in it shares of your own company, and know or believe that executives in your company have back-dated their stock options, please contact us to discuss your legal options.

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Employees who are paid by the hour, particularly low wage workers, are often cheated by their employers.  Hourly workers are routinely denied proper overtime pay and are often paid less than minimum wage according to a newly released study based on a survey of workers in New York, Los Angeles and Chicago.

In surveying 4,387 workers in various industries, including child care, retail and apparel manufacturing, the researchers found that the typical worker had lost $51 the previous week through wage violations, which translates into an average loss of 15% in pay.  According to the New York Times, the study -- the most comprehensive examination of wage-law violations in a decade -- also found that 68% of the workers interviewed had experienced at least one pay-related violation in the previous week.  Moreover, the study found that 26% of the workers surveyed had been paid less than the minimum wage, that 1 in 7 had worked off the clock, and that 76% of those that worked overtime were not paid their proper overtime compensation.

Annette Bernhardt, an author of the study and policy co-director of the National Employment Law Project, stated that, “When unscrupulous employers break the law, they’re robbing families of money to put food on the table, they’re robbing communities of spending power and they’re robbing governments of vital tax revenues.”

This study comes only ten months after a federal judge in Manhattan awarded $4.6 million in back pay and damages to 36 deliverymen at two Saigon Grill restaurants for violating state and federal minimum wage and overtime laws. In those cases, the Chinese immigrants were required to work 11 to 13 hours a day, six days a week, without proper compensation for overtime. Even more egregious, the company would take illegal deductions out of their salaries for various “infractions,” such as allowing the restaurant door to slam or for failing to log a delivery.

If you believe that you’ve been underpaid by your employer, or that your pay was improperly “docked” by your employer based upon alleged infractions of company policy, please contact us to discuss your legal options.

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