Updated, 3:38 p.m. with comment from Primanti Bros.
Primanti Bros. — the sandwich shop chain synonymous with Pittsburgh — is being sued by a former employee.
Chelsea Koenig filed a class action suit in District Court last month, alleging that Primanti Bros. didn’t pay its tipped employees the minimum wage. Koenig is identified in the suit as a Pennsylvania resident who worked as a bartender at the Mt. Lebanon location, one of 23 in the state. There are also several Primanti Bros. outside of Pennsylvania.
At question is a section of the Fair Labor Standards Act that allows employers to take what’s called a tip credit. That means an employer can pay a lower minimum wage — $2.83 an hour in Pennsylvania — as long as they ensure that an employee’s tips bring the hourly wage to the higher minimum, $7.25.
But there are strict standards that employers have to follow in order to legally use the tip credit. The biggest of all: ensuring that employees actually make the minimum wage for every hour they work.
The tip credit
According to the suit, first reported by The Pennsylvania Record, Koenig’s hourly wage from Primanti Bros. was $2.83.
“Plaintiff does not ever recall her hourly wage being raised above $2.83 for any day she worked for Primanti Bros., irrespective of how little tips she earned or the type of work she performed,” the suit states.
Under the FLSA, an employer is required to make up the difference if tips fall short. So if a tipped employee in Pennsylvania doesn’t make $4.42 in tips per hour, the employer has to raise their hourly wage to make up the difference.
“Defendants took the maximum tip credit permissible for every hour worked by its tipped employees,” the suit states of Primanti Bros., “irrespective of whether its tipped employees actually earned sufficient tips to substantiate the tip credit claimed or whether the employees were engaged in tip generating work.”
In the suit, Koenig also alleges that Primanti Bros. did not inform employees that it was taking the tip credit.
According to the Department of Labor’s Wage and Hour Division, an employer must tell employees either orally or in writing that it plans to take the tip credit and inform them of what exactly that means.
Then there’s the issue of side work, like prepping a work station and cleaning after a shift. The suit claims that Primanti Bros. required its tipped employees to perform this type of work. In Koenig’s case, she states that she spent 30 percent of her shifts doing these tasks and not getting tips.
Courts have found that if side work exceeds 20 percent of an employee’s shift, then an employer cannot use the tip credit and instead needs to pay employees the full, $7.25 minimum wage.
“Primanti Bros. is unable to comment on the specifics of this, or any pending, legal matters,” company spokesperson Ryan Wilkinson said in a statement. “But, as we’ve demonstrated in our more than 83-year history, we’ve always been focused on providing a great experience for our hardworking employees – our most valuable players. We believe that this claim is without merit and will remain committed to ensuring all employees are provided with a safe and fair work environment.”
Attorneys for Koenig did not respond to requests for comment.
A widespread problem
A report by Temple University released last year found that “wage theft … is a pervasive problem hurting hundreds of thousands of low-wage workers across the state each week.”
They estimated that nearly 400,000 workers in Pennsylvania experience a minimum wage violation during a given week, while 300,000 experience an overtime violation. That adds up to between $19 million and $32 million in lost wages a week.
In the Pittsburgh region, the report estimated that 3,322 waiters, cafeteria workers and bartenders experience minimum wage violations. An additional 7,611 are subjected to overtime violations — like getting paid the minimum wage instead of time-and-a-half — and 5,855 aren’t paid for off-the-clock work.
Jordan Romanus, an organizer with Restaurant Opportunities Center United, said the Pittsburgh office is working on three wage theft cases at the moment.
“There’s no antidote,” he said. “There’s no enforcement in place for servers or any front-of-the-house staff because it is so prevalent.”
The federal Wage and Hour Division employs inspectors to investigate allegations like wage theft. The Bureau of Labor Law Compliance within Pennsylvania’s Department of Labor and Industry also investigates complaints about minimum wage violations. Both have Pittsburgh offices.
But the Temple report found that both agencies lack sufficient resources to enforce labor laws and investigate wage complaints.
“The best way to handle these issues,” Romanus said, “is just to pay over the minimum wage.”