Raw Deal: Servers Sue Sushi Restaurant Over Wages

Two former servers at Ginza Japanese Restaurant in Wauwatosa filed suit Friday in federal court in Milwaukee against Ginza PZW Corp. and Ping Xiao Fang, who operates the business, alleging violations of both state and federal wage laws.

According to one of the plaintiffs, Ginza initially paid her no wages at all, only letting her keep tips. Later, both of the servers assert, Ginza did begin cutting paychecks, but then simply demanded they pay the restaurant back the after-tax portion of their pay.

“This is one of the most blatant violations of federal and state wage laws we have seen,” said Larry Johnson of Cross Law Firm S.C., one of the attorneys for the former employees.

Neither of the defendants could be reached for comment.

Servers living on tips alone, suit alleges

Ginza, 2727 N. Mayfair Rd., opened in May 2010, offering sushi and other Japanese dishes.

Lin Wu began as server with the restaurant in May 2011 and Liu Zeng Qin began working there in February 2012. Both left the restaurant in August 2012 due to pay practices at the restaurant.

Normally, servers are paid at a sub-minimum wage rate, plus their tips. However, the complaint alleges that Ginza management wholly failed to pay any base compensation to Wu and Qin, who only received tips.

Although an employer can pay a tipped employee a sub-minimum wage of $2.33 per hour, “the employer has to at least pay the employee some hourly rate,” Johnson said.  

According to the complaint, for a time, Wu received no paycheck from Ginza or Fang at all. Then in the spring of 2012, Ginza began paying a monthly salary to each server.

However, the complaint alleges Ginza and Fang required Wu and Qin to pay back the after-tax portion of the wages to the restaurant each pay period. Consequently, Wu and Qin still received only their tips as compensation under the scheme.

Overtime not paid either, attorneys say

“Not paying minimum wage was only the beginning,” said Nola Hitchcock Cross, another of the attorneys who filed suit for the servers. “Ginza Japanese Restaurant did not pay overtime compensation when the employees worked over forty hours each workweek.”

Also, the complaint alleges that Ginza Japanese Restaurant failed to have their servers sign a tip declaration each pay period which evidenced that the wages paid by the employer, when added to the tips received by the employee, exceeded the minimum wage.

“Without the tip declaration, an employer cannot take advantage of the sub-minimum wage,” explained Johnson.

The attorneys at Cross claim in the lawsuit that Ginza Japanese Restaurant failed to pay the two servers in the amount of $46,000. According to Cross, “Under the Fair Labor Standards Act, the servers are entitled to their back pay, plus an equal amount of liquidated damages and attorneys’ fees and costs, so it truly does not pay for small businesses to cut corners on paying wages to employees.”

Servers say they finally couldn't get by anymore

When a minimum-wage worker receives just $15,080 annually for full-time work, any violation of the the FLSA can have devastating effects to an individual’s ability to survive, the attorneys said.

When Ginza forced these two servers to work without paying them anything but the retention of their tips, it was impossible for Qin and Wu to keep working there, Cross said. To any restaurant worker, or any low-wage worker, the minimum wage is not much, but without it, they cannot survive, Cross said.

“Employers are going to greater lengths to cut labor costs as the recession drags on,” Johnson said, “and the restaurant industry is one that is full of wage violations.”

Earlier this year, Texas Road House settled a case in Massachusetts for $5 million based on allegations that tips were shared with management. In response to rampant violations, the Department of Labor modified its position on management's use of servers’ tips where no tip pool is in place.

While tip pool cases are numerous, the Ginza case includes allegations that that Cross describes as “wage theft, plain and simple.”

She said the law firm will pursue full recovery for the servers and added that she hopes other restaurants will take instruction from the amount of damages that can be awarded in such cases.

“Full-time minimum-wage work commands annual pay of just $15,080, but when workers are cheated out of this bare minimum, they cannot even scrape by."