Pricey Manhattan restaurant owes staff $500,000 for unpaid tips

Per Se restaurant

A top restaurant in New York City will pay $500,000 in restitution to workers for failing to pay some staff their tips.

New York Attorney General Eric Schneiderman's office announced a settlement with Per Se over claims it failed to pay its wait staff a 20% "service charge" that was added to private dining events over a 21-month period starting in January 2011.

Per Se, owned by famed chef Thomas Keller, is one of of most expensive restaurants in New York, with a tasting menu that runs $310 per person.

"Our employees were never short-changed and no monies intended for employees were withheld," a spokesperson for Per Se said Thursday.

Around 60-70 workers are expected to be involved in the settlement.

Related: Tipped workers in New York will get a raise

The attorney general claims the restaurant violated New York labor laws by not allocating the added fee as tips to the staff working the private events, and told customers that the fee covered gratuity. According to the agreement, some Per Se staff referred to the 20% charge as a charge for "service" or "gratuity" in some e-mails with potential customers.

Instead, the money from the charge went to other expenses like rent, maintenance, employee wages and benefits and marketing, the agreement said.

"Today's agreement ensures that workers at Per Se will not continue to be cheated out of their hard-earned tips -- tips that customers intended for them," Schneiderman said in a press release Thursday. "And it reaffirms the right of satisfied restaurant-goers not to be misled about whether a 'service charge' is actually paid to workers as a tip, which the law requires."

Waitstaff at the upscale restaurant are generally paid well for the industry. The agreement details that staff can take home around $16.60 to $28 an hour, depending on the position.

But the restaurant claims they make even more. Per Se's spokesperson said a waiter makes around $116,000 a year, including overtime and gratuities.

In 2011, a law went into effect in New York that requires food establishments to make it clear to customers when an administrative charge will not cover gratuity for the staff.

Per Se updated the language in its private dining documents in the second half of 2012, to rename the charge "operational" and clarify that it doesn't cover gratuity, according to the agreement.

"Per Se revised this language on its own, well before it ever heard from the Attorney General's office, and has been in compliance for nearly three years," the spokesperson said.

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