Philadelphia Area Diner Ordered to Pay $1.35 Million in Back Wages and Compensation

September 20, 2022
diner waitress cash tip for service

A Philadelphia area diner was ordered to pay $1.35 million in back wages and compensation to more than 100 current and former employees after being found guilty of using waiters’ tips to pay wages to its bus staff.

A federal judge ruled that the Empire Diner in Lansdowne, Pennsylvania purposely violated state and federal labor laws, ordering the owner and manager to return $675,000 in lost tips and along with the same amount in damages, according to the Department of Labor. The diner owner said he intends to appeal the decision.

An investigation into the restaurant revealed the violations occurred regularly between 2014 and 2018, resulting in the DOL filing its first lawsuit in 2018. According to the lawsuit, the Empire Diner violated minimum wage, overtime and recordkeeping laws by requiring waitstaff to turn over 10 to 15 percent of their tips to the restaurant at the end of their shifts, ostensibly for a collective tip pool. Federal minimum wage was $7.25 per hour between 2014 and 2018.

According to the DOL, the Empire Diner paid its waitstaff $2.83 cash wages per hour during this period, then falsely claiming the difference in tip credits of $4.42 per hour, along with shorting the tip pool to pay bus staff wages. The investigation also found that the diner failed to pay federally mandated overtime wages of time and one half to kitchen staff who worked more than 40 hours per week. The DOL reported that this is the second time the Empire Diner was investigated for violating overtime pay regulations, per the Fair Labor Standards Act.

Also, according to the DOL, restaurant personnel also interfered with the agency’s investigation by asking employees to lie to investigators regarding pay practices when questioned.

Empire Diner owner, Ihsan Gunaydin, said he disagrees with the ruling and plans to appeal the court’s decision, stating that he did not knowingly violate tip pool requirements and discontinued paying bus staff with tip pool monies. Gunaydin also blamed waitstaff for unfairly preventing the diner from claiming tip credits by incorrectly reporting cash tips as instructed. He has until mid-October to file an appeal.

Employment Lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. Fight for Workers Rights

At Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C., our employment law attorneys fight to protect workers from employers’ unfair and unlawful business practices. If you feel that your employee rights have been violated, call our employment law attorneys at 610-565-3701 or contact us online to schedule an initial consultation. Located in Media and West Chester, Pennsylvania, we serve clients in Delaware County, Chester County, and Montgomery County.