Mario Batali Pays Big for Tip Skimming
Mario Batali is a celebrity chef and restaurateur who owns successful eateries across the United States. Batali has previously made headlines for criticizing the way bankers take money from the people and pocket it for themselves. Somewhat ironically, Batali is now under fire for taking money away from his own employees. The chef and his business partner, Joseph Bastianich, have agreed to pay a settlement of $5.25 million to dollars to employees of Babbo, Bar Jamon, Casa Mono, Esca, Lupa, and Otto, among others, for years of a practice called “tip skimming.”
Tip Sharing vs. Tip Skimming
Under the law, tips belong to the employees who earned them, not to the employer. Some restaurants participate in a practice called tip sharing or tip pooling. Tip sharing involves employees pooling all of their tips at the end of a night, and then dividing the tips up again. Tip pooling works to compensate employees, such as bus boys, hostesses, or bartenders, who may provide services, but who may not receive tipsdirectly from customers. Tip sharing is a legal practice in many states, including Oregon; however, tips must only be divided among certain front-of-the-house employees. For example, kitchen staff or supervisors may not share in the tips.
On the other hand, tip skimming is the unlawful practice of a restaurant pooling all the tips at the end of the night, taking a percentage for the house, and dividing out the rest among employees. This practice allows restaurant owners to profit by taking rightfully earned tips out of the hands of deserving employees, and is against the law.
Batali Pays Up
Nearly two years ago, former Babbo waitress Stephanie Capsolas and former kitchen runner Hernan Ricardo Alvarado led 117 plaintiffs in a lawsuit against Batali and Bastianich, alleging unlawfully tip skimming practices in their restaurants stemming back to 2004. Specifically, the restaurants had the policy to take four to five percent of tips at the end of every shift in order to cover the salaries of sommeliers. Not only did this take tips away from employees, but also caused many tipped employees to fall below minimum wage.
Batali and Bastianich have agreed to pay $5.25 million in settlement, which will be divided up among 1,100 current and former employees of the restaurants to make up for illegally skimmed tips. This settlement is the largest tip skimming settlement in United States history. Other significant tip skimming settlements have cost restaurant owners $3.9 million, $3.1 million, and $2.5 million dollars.
Tip skimming is an unlawful—and costly—practice for restaurant owners. If you believe your employer is illegally withholding a percentage of some of your tips, you deserve to be compensated for
that lost income. Do not hesitate to contact the employment attorneys at HKM to discuss a possible case.