Many Chinatown restaurants have changed their practices following the 88 Palace ruling. But workers at Chinatown's largest restaurant, Jing Fong at 20 Elizabeth Street, are now protesting, alleging their boss Shui-ling Lam pockets 35 percent of waiters’ banquet tips. AALDEF plans to file a new lawsuit on behalf of 28 workers, in addition to an unresolved 2006 lawsuit against the restaurant. In 1997, the state won $1.1 million in back wages and stolen tips for Jing Fong workers. Despite the ruling, the workers claimed their boss started using the new “service charge” to retain workers' tips and later increased his share of the tips from 21 percent to 35 percent.
Steven Wong, founder of Chinese Restaurant Anti-Violence Society, said, “The lawsuits warn Chinese restaurant owners that they can no longer say, 'this is the Chinese culture' to justify their long-term illegal practices.”
Wing Lam of the Chinese Staff & Workers’ Association said labor violations are still rampant in many Chinese restaurants in Queens and Brooklyn and they will mobilize more disadvantaged workers to end the so-called “slave labor."
Ken Kimmerling, legal director of AALDEF, said the lawsuits highlighted an overlooked problem – even upscale restaurants in fashionable neighborhoods are abusing their workers. “It’s only the beginning, we will file three more claims very soon,” he said.
Attorney Daniel A. Hochheiser has filed an appeal on behalf of the 88 Palace owners. “It was a technical ruling that is a legal anomaly triggered by the court’s classification of a portion of the 15 percent banquet fee as tips instead of service charge," Hochheiser said. "This one classification by the court triggered a series of legal consequences which provide a windfall to the plaintiffs who received total compensation in excess of the minimum wage."
Rachel B. Passaretti, an attorney at Skadden, Arps, Slate, Meagher & Flom, who worked on the 88 Palace case pro bono, refuted that, saying, “It doesn’t matter how employers label things – whether as ‘service charge’ or something else, the importance lies in the customer’s perception of the fees. If it truly is a service charge, it should be reported for accounting purposes.”
