Labor & Employment Law Daily Wrap Up, WAGE-HOUR—MINIMUM WAGE—N.D. Ohio: Restaurant employees entitled to damages after performing non-tip-producing tasks, (Mar 31, 2025)

By Ursula Furi-Perry, J.D., MBA

Tipped employees were entitled to damages, as they were required to perform non-tip-producing tasks beyond what the FLSA allows.

Both tipped and non-tipped employees sued a hospitality group, claiming they were paid less than the required minimum wage through various improper practices, including performing substantial non-tip-producing tasks, being required to work off the clock, illegal paycheck deductions, and tips being withheld or paid to unauthorized individuals. A federal district court in Ohio granted summary judgment and a default judgment in favor of the employees, holding that were entitled to damages, as they were required to perform non-tip-producing tasks beyond what the FLSA allows (Neuhoff v. Hospitality Goals, LLC, No. 1:24 CV 324 (N.D. Ohio Mar. 26, 2025).

The plaintiffs were a group of servers, bartenders, and chefs who worked at Jade Steak and Sushi (“Jade”) in Cleveland, Ohio. The plaintiffs filed suit, alleging violations of the FLSA and the Ohio Minimum Fair Wage Standards Act (OMFWSA).

Wage claims. According to the tipped employees, they were paid less than the required minimum wage through various improper practices, including performing substantial non-tip-producing tasks, being required to work off the clock, illegal paycheck deductions, and tips being withheld or paid to unauthorized individuals.

Meanwhile, the chefs contended that they regularly worked more than 40 hours per week without receiving the mandatory overtime pay. Additionally, one chef’s final paycheck bounced, while the other chef was not paid his last paycheck at all.

Operations shuttered. The hospitality group that owned and operated Jade, ceased operations at the restaurant in 2023, despite having annual revenues of $1.7–$1.8 million. The group failed to appear in court. An additional named defendant, the general partner and direct manager of the restaurant, represented himself in the proceedings. The employees moved for default judgment against the hospitality group and summary judgment against the general partner.

Non-tip-producing tasks. In assessing whether there were no material facts at issue so that the employees were entitled to judgment as a matter of law, the court first found that the tipped employees were required to perform non-tip-producing tasks beyond what the FLSA allows. The employees presented evidence that they were required to perform such tasks as “taking out trash, dusting, sweeping areas where they did not bartend or serve, putting lamps on tables, washing dishes, making salads and other food, moving furniture, replacing light bulbs, cleaning stairwells, removing bugs from window sills, cleaning garage doors, walls and bathrooms, repairing toilets, replacing toilet paper in bathrooms, working security, and pest extermination.”

Dual jobs regulation. Under the dual jobs regulation, tipped employees cannot spend more than 30 consecutive minutes on non-tip-producing work. As the employees exceeded this limit, the court ruled that the tip credit was invalidated, entitling them to full minimum wage compensation.

Unauthorized deductions. Moreover, the court held that two of the tipped employees experienced unauthorized deductions from their pay, including deductions for customer dine-and-dash incidents, which reduced their earnings below the tipped minimum wage. This practice violated both the FLSA and Ohio law, the court held. It also credited the employees’ declarations, stating that they worked significant hours off the clock, holding that the employer violated both federal and Ohio wage laws. Because the employer failed to provide contrary evidence, the court accepted the employees’ claims and awarded damages accordingly.

Tip credit. In addition, the court also held that the employer improperly withheld and distributed tips to individuals not eligible under federal law and paid those tips out to "Jade Pool" and individuals not permitted to be in the tip pool. Employers who keep tips or improperly distribute them forfeit the ability to claim a tip credit. The court ruled that the employees were owed back pay equal to the difference between the tipped minimum wage and the full minimum wage, along with additional liquidated damages under both federal and state law.

Non-tipped employees. Regarding the non-tipped employees, the court held that, as they worked more than 40 hours per week, they were entitled to overtime pay at 1.5 times their regular hourly rate under both the FLSA and Ohio law. Since the employer failed to pay them this overtime, the court awarded back pay and liquidated damages. Moreover, the chefs were unlawfully denied their final paychecks. Under Ohio law, employees are entitled to liquidated damages equal to twice the amount of unpaid wages for such violations. The court applied this provision, awarding the chefs compensation for their final paychecks plus liquidated damages.

Ultimately, the court granted summary judgment against the individually named manager and default judgment against the hospitality group.

The case is No. 1:24 CV 324.

Judge: Nugent, D.

Attorneys: Julian Meyer (Voudris Law) for Mary Neuhoff.

Cases: WageHour MinimumWage Overtime RemediesDamages StateLawClaims OhioNews