Rivers Casino Tip Earners Reach $5.5 Million Preliminary Settlement
Employees of the Rivers Casino reached a preliminary $5.5 million settlement with Rush Street Gaming LLC following numerous claims of payment issues. A New York federal judge stated that the proposed settlement meets the standards of reasonableness for preliminary approval. An approved class of “non-exempt, hourly, tipped employees at Rivers Casino who earned a direct cash wage of less than the applicable New York state minimum wage in one or more workweeks between February 8, 2017 and April 12, 2022” will be included in the settlement.
Rush Street Gaming LLC, which operates the brand Rivers Casino in several cities, was accused of violating overtime pay rules and misinforming tipped employees about “required tip credit provisions,” before paying them a sub-minimum wage.
Regulating Tips and Cash Wages
The Department of Labor describes eligible tipped positions as “work that produces tips, as well as work that directly supports work that produces tips, provided that the directly supporting work is not performed for a substantial amount of time” and further clarifies it as, “any work performed by a tipped employee that provides service to customers for which the tipped employee receives tips and that directly supporting work is work that is performed in preparation of or otherwise assists tip-producing work.” In other words, anyone who serves customers directly or indirectly can earn tips or be included in that business’ tip pool.
New York employers who manage tipped service employees may offset minimum wage requirements with qualifying tip credits. Instead of a standard hourly rate, an employer can opt to provide a “cash wage” to be combined with a guaranteed tip credit that amounts to or is above minimum wage. Minimum cash wages vary throughout the state.
In New York City and Long Island, service employees are entitled to a $12.50 hourly (cash) wage, which must be substantiated with a $2.50 tip credit. In the rest of the state where minimum wage is set at $13.20, employers are obligated to offer cash wages of $11 and can combine them with tip credits of at least $2.20.
Employers who wish to compensate workers with the tip credit method must ensure their employees are properly notified of the modified payment structure. At the heart of Kendra Brown’s complaint against Rivers Casino, where she worked for years as a server, are allegations that she was not provided a written notice outlining the company’s compensation plans. Brown claims that the company’s inexplicit plan included paying her and other coworkers using the tip credit minimum wage exception, including the specific amount of tip credit to be taken from the basic hourly rate.
Brown also alleged that the company failed to properly compensate overtime wages for workers; the company calculated overtime based on cash wages, rather than the state minimum wage as required by law.
Contact the Law Office of Christopher Q. Davis
Has your employer withheld your rightfully earned wages? If so, seek legal assistance from the employment lawyers at the Law Office of Christopher Q. Davis, located in New York City and in Livingston, New Jersey. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.
Our employment lawyers specialize in many areas of the law, including FMLA and unpaid wages and overtime. Whatever your employment issue is, please reach out for a consultation today.