The opinion of the court was delivered by: Roslynn R. Mauskopf, United States District Judge.
Plaintiffs bring this putative class and collective action for monetary relief against their former employers, defendants Kang Yue USA, d/b/a Moca Asian Bistro ("Moca"), and Johnson Chen, Moca's CEO and partial owner, alleging violations of the federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and New York Labor Law §§ 196-d and 650 et seq. Plaintiffs' claims arise out of defendants' alleged retention of tips and use of the "tip credit" against the minimum wage. Plaintiffs seek disgorgement of the tips retained, the tip credit, and liquidated damages. Presently before the Court are plaintiffs' and defendants' cross-motions pursuant to Rule 56 of the Federal Rules of Civil Procedure for partial summary judgment. For the reasons below, plaintiffs' motion is GRANTED IN PART and DENIED IN PART, and defendants' motion is GRANTED IN PART and DENIED IN PART.
Plaintiffs were employed as servers at Moca for various periods of time between September 2008 and December 2009. (See Pls.' 56.1 Stmt. (Doc. No. 49-2) ¶ 4.) Specifically, Utama worked at the restaurant from September 2008 to December 2009; Widjaja worked from September 2008 to January 2009; Gunardi worked from October 2008 to November 2008; and Ng worked from September 2008 to October 2008. (Defs.' 56.1 Cntrstmt (Doc. No. 50-2) ¶ 4.) Plaintiffs were entitled to tips, thus enabling defendants potentially to take advantage of state and federal statutes that allow employers of tipped employees to pay less than the minimum hourly wage, with the tips making up the difference. This discount against the minimum wage is known as the "tip credit," and is discussed more fully below. All plaintiffs earned less than the minimum hourly wage, exclusive of tips, except Ernie Ng, who was paid above minimum wage. (Pls.' 56.1 Stmt. ¶ 5; Defs.' 56.1 Cntrstmt ¶ 17.)
Each night they worked, plaintiffs received the tips earned that day, both their cash tips and their credit card tips. (Dep. of Johnson Chen (Doc. No. 49-8) ("Chen Dep.") at 8--9, May 10, 2010.) The restaurant would give plaintiffs their credit card tips from the restaurant's own cash reserves, and the restaurant would eventually be reimbursed when the credit card issuer processed the credit card transactions. (Id. at 9.) However, upon disbursement to plaintiffs, defendants withheld 11.5% of the credit card tips. (Id.) The reason for this is two-fold. First, defendants deducted 3.85% to cover the cost it incurred in converting the plaintiffs' credit card tips into cash -- effectively the processing fees charged by the credit card company. (Id.) Second, defendants deducted 7.65% for payroll taxes. (Id.) *fn2
It is undisputed, however, that defendants did not forward the 7.65% deductions to the Internal Revenue Service ("IRS"), except with respect to Utama, whose withholdings defendants forwarded to the IRS beginning August 2009. (Chen Dep. at 11; see Aff. of Victor Utama (Doc. No. 49-5) ¶ 3.) Only Utama, therefore, received a W-2 wage statement, which corresponded to the period following August 2009. (Id.; see Aff. of Ernie Ng (Doc. No. 49-4) ¶ 2; Aff. of Ampri Gunardi (Doc. No. 49-6) ¶ 2.) Defendants admit that they did not forward the monies, instead depositing them in a bank account, and note that plaintiffs did not provide defendants with their Social Security numbers. (Chen Dep. at 11.)
Utama also had to share his tips with the restaurant's sushi chef, Alex Yeh, after August 2009, at which point only Utama was still working at the restaurant. (Id. at 8; Pls.' Reply in Further Supp. (Doc. No. 51) at 4.) Yeh had the authority to hire and fire employees, supervise employees, set employees' schedules, and set employees' pay. (Chen Dep. at 6--7.) In addition, Yeh was responsible for ensuring orders were correct and occasionally stood in as a cashier, a post usually reserved for Moca management. (Dep. of Victor Utama (Doc. No. 49-10) at 33, 36, June 3, 2010). Defendants paid Yeh a fixed salary. (Chen Dep. at 7.)
On December 16, 2010, plaintiffs moved for partial summary judgment as to liability under the minimum wage and tip credit provisions of the FLSA and New York Labor Law, pursuant a briefing schedule established at a pre-motion conference on October 28, 2010. (See Pls.' Mot. for Summ. J. (Doc. No. 48) at 1; Minute Entry dated Oct. 28, 2010 (Doc. No. 34) (establishing briefing schedule).) On December 13, 2010, defendants moved for partial summary judgment dismissing the claims of Ng.*fn3 (Defs.' Cross-motion for Summ. J. (Doc. No. 45) at 5).
Summary judgment is appropriate when the pleadings, depositions, interrogatories, admissions, and affidavits demonstrate that there are no genuine issues of material fact in dispute and that one party is entitled to judgment as a matter of law. See Fed. R. Civ. P 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
In deciding a summary judgment motion, a district court must draw all reasonable inferences in favor of the non-moving party. See id. at 249 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970); Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 137 (2d Cir. 1998). Thus, the court must not "weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments." Amnesty Am. v. Town of W. Hartford, 361 F.3d 113, 122 (2d Cir. 2007) (quoting Weyant v. Okst, 101 F.3d 845, 854 (2d Cir. 1996). Any evidence in the record of any material fact from which an inference could be drawn in favor of the non-moving party precludes summary judgment. See Castle Rock Entm't, 150 F.3d at 137.
Once the movant has demonstrated that no genuine issue of material fact exists, such that it is entitled to judgment as a matter of law, then "the non-moving party must come forward with 'specific facts showing that there is a genuine issue for trial.' " Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P.56(e)). However, there must exist more than mere "metaphysical doubt as to the material facts" to defeat a summary judgment motion. Id. at 58. Instead, the non-moving party must present "concrete evidence from which a reasonable juror could return a verdict in his favor." Anderson, 477 U.S. at 256. Only disputes over material facts "that might affect the outcome of the suit under the governing law" will properly preclude the entry of summary judgment. Id. at 248; see also Matsushita, 475 U.S. at 586.
The federal minimum hourly wage until July 23, 2009 was $6.55. Beginning July 24, 2009, the minimum wage increased to $7.25. The state minimum wage was $7.15 until July 24, 2009, at which point it, too, increased to $7.25. *fn4 See 29 U.S.C. § 206; N.Y. Lab. Law § 652(1). However, under state and federal law, employers may deduct from the hourly wage of tipped employees an amount known as the "tip credit," designed to account for the tips received, provided that "all tips received by [the] employee have been retained by the employee." 29 U.S.C. § 203(m); see also N.Y. Codes, R. & Regs. § 146-1.3; N.Y. Lab. Law § 196-d. The tip credit allowed employers to pay tipped employees $4.60 per hour until July 24, 2009, and $4.65 thereafter. N.Y. Codes, R. & Regs. § 137-1.5 (2009); see also, e.g., Hai Ming Lu v. Jing Fong Rest., Inc., 503 F. Supp. 2d 706, 711 (S.D.N.Y. 2007) (holding that employers are not entitled to the tip credit under state or federal law if they retain any portion of employees' tips); accord Copantitla v. ...