Ithaca Restaurant Agrees Not To Keep Wait Staff's Tips

Attorney General Spitzer today announced an agreement with an Ithaca restaurant that failed to distribute tips to its waiters and waitresses.

As part of the agreement, New Delhi Diamond’s Restaurant - located at 106 West Green Street in Ithaca - and its owner, Baldhev Sekhon, agreed to pay $10,000 in restitution to its wait staff.

"State law is clear that tipped workers have a right to keep their tips," Spitzer said. "Customers leave tips as a reward for good service, and rightly believe that workers who serve them will receive that money."

Spitzer’s investigation determined that between 2003 and 2004, Diamond’s Restaurant demanded that its wait staff turn over to management all tips left by customers. It is illegal under state and federal labor laws for an employer to demand any portion of tips left by customers.

As a result of the settlement, the restaurant will, for the first time, provide paid personal days to employees with over one year’s work history and will be subject to monitoring by the Attorney General’s office.

Since the investigation began, Diamond’s Restaurant has permitted its waiters and waitresses to keep all tips left by customers, in compliance with the labor laws.

New York law permits employers to pay a reduced minimum wage to food service workers in the restaurant industry, provided such workers earn sufficient tips so that their hourly wage, with tip income, is at least the state minimum wage, which is currently six dollars per hour. No matter what the workers’ hourly wages are, however, an employer may not demand any portion of the workers’ tips.

"The Tompkins County Workers' Rights Center applauds the workers who first reported these abusive practices to us," said Carl Feuer, Organizer with the Center. "We are pleased as well by the vigorous enforcement of state law in this case by the Attorney-General's office."

The case was handled by Assistant Attorney General Deborah M. Baumgarten of the Labor Bureau under the supervision of Deputy Bureau Chief Jennifer Brand.