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Another Hotspot Sued By Workers Over Tips

Crain’s New York Business - Daniel Massey

The upscale roof bar 230 Fifth is the latest New York City hotspot being sued for allegedly misappropriating tips and paying workers less than minimum wage.

A complaint filed in federal court in Manhattan charges that the city’s largest rooftop bar and its owner, art collector and entrepreneur Steven Greenberg, have “enjoyed great success at the expense of their hourly workers”—an expense the plaintiffs’ lawyer says may have reached into the millions of dollars.

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The suit, brought on behalf of four workers, alleges the posh night spot broke various state and federal labor laws by “refusing to pay them the proper minimum wage, refusing to pay them proper overtime compensation, and compelling them to participate in a mandatory tip pool.”

The workers also allege that 230 Fifth kept mandatory service charges that customers at private parties believed would be paid to workers.

“We never received any gratuities from these parties because customers felt they had already taken care of us with the 20% gratuity,” said Carolina Karth, a 27-year-old bartender who is one of the plaintiffs, in a telephone interview. “In most cases, we rarely ever saw any of that money. That was a huge problem. That was a great effect on our night.”

Law firm Outten & Golden, which is representing the workers, is seeking class action status for the suit. The firm filed a similar complaint in June against the midtown restaurant Tao and one in March against a club in the meatpacking district, Buddha Bar NYC. A February ruling by the New York Court of Appeals that mandated restaurants distribute tips to workers if patrons believe that is who is getting them has laid the groundwork for these suits and others that are likely to follow, according to labor lawyers.

Linda Neilan, one of Outten’s attorneys, said the alleged violations at 230 date back to the lounge’s opening in May of 2006 and that the number of workers that would be in the class would easily exceed 100. She said an exact dollar amount would not be known until discovery is completed, but said, “We anticipate it could be millions of dollars.”

According to its Web site, 230 Fifth has hosted such high profile events as a Sopranos cast party and the movie premiere party for The Devil Wears Prada. It was also the site of the 2008 Crain’s “40 Under 40” celebration.

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