The owners of two New-York based restaurants have settled a time and attendance lawsuit, according to a Newsday report. The outlet stated that the owners of two separate locations where the violations were said to have occurred agreed to a settlement in the amount of $3.5 million. The case was initially filed on behalf of the plaintiffs, who accused the defendants of withholding tips paid by customers to wait staff.
The suit was given class-action status and a settlement agreement was reached on April 4. All told, more than 500 people will receive a portion of the award amount, despite no admission of guilt or wrongdoing on the part of the two defendants.
The practices undertaken by the defendant violate both the Fair Labor Standards Act and New York Labor Laws with regard to tips and gratuities. According to Newsday, the defendants routinely levied a 20 percent service charge to guests visiting their businesses, but kept the extra money instead of rightfully paying it out to employees.
The lawsuit claims that these illegal practices took place dating back as far as 2006 in certain instances.
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