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Ocean City Restaurants Sued for Unpaid Wages

On Behalf of | Oct 30, 2017 | Fair Labor Standards Act |

The popular restaurant, Harpoon Hanna’s, located just across the Delaware line next to Ocean City, Maryland, has been sued for failure to pay proper wages to a tipped employee. Within the last year, a number of popular Ocean City restaurants have been sued by employees for failure to pay proper wages, including the failure to pay time-and-a-half for overtime.

Marylanders, like me, who frequent the Ocean City beaches every summer, are likely familiar with restaurants like Harpoon Hanna’s, that offer seafood and drinks with gorgeous water views. According to OC Today, restaurants such as Hooper’s Crab House, Mickey Fin’s, and Sunset Grille are all currently involved in wage and hour disputes. In the past few years, Fat Daddy’s, Dead Freddies, and Abbey Burger Bistro all settled similar wage disputes.

The new lawsuit alleges that Harpoon Hanna’s maintained an illegal tip-pool arrangement in violation of wage and hour laws. The Plaintiff, Aaron Miller, alleges that servers were required to participate in a tip-sharing system that included other employees who do not customarily and regularly receive tips in their jobs. Wage and hour laws include specific rules as to which employees may and may not be included in a tip-pool arrangement.

Additionally, wage and hour law requires that employees be put on notice regarding their tipped employee rate of pay and any “tip credit” included as part of their wages. The “tip credit” and notice requirements have become heavily litigated issues, and are a common trip-wire for well-intending restaurant owners. There is a burden on the restaurant to prove it provided notice to tipped employees that they are paid through a lower tipped employee minimum wage ($2.13 an hour according to federal law, and at least $3.63 an hour in Maryland) and by tips that must, together, equal or exceed the regular minimum wage. Otherwise, if no notice is provided, the restaurant may be on the hook for the difference between the tipped employee minimum wage and the regular minimum wage (7.25 an hour according to federal law, and at least $9.25 an hour in Maryland).

Additionally, OC Today noted within the last year, other Ocean City restaurants and businesses were sued for wage and hour violations. These restaurants include Tokyo Seafood Buffet, Sea Scape Motel, and Sahara Cafe. These cases involved alleged failures to pay employees overtime (time-and-a-half pay for each hour over 40 hours per week), and all were settled prior to trial.

Thatcher Zavaro & Mani regularly represents businesses and employees in wage and hour disputes. Please contact us about any wage and hour issues that you are facing or to prevent those that may be in your future.