NEW YORK (Reuters) - Per Se, the three Michelin-starred Manhattan restaurant run by Thomas Keller, will pay $500,000 to settle charges it withheld tips from workers who staffed private dining events, even as it portrayed those tips to customers as gratuities.
Thursday's settlement resolves a New York probe accusing Per Se, whose prix-fixe tasting menus cost $310 before drinks, tax and tip, of violating state labor law by using what it told customers on bills was a 20 percent "service charge" for restaurant operations, not to pay employees.
Per Se was also accused of telling customers who asked that the charge was the equivalent of a gratuity.
These practices occurred from January 2011 to September 2012, and violated a new law governing mandatory service charges, state Attorney General Eric Schneiderman said.
"Today's agreement ensures that workers at Per Se will not continue to be cheated out of their hard-earned tips," Schneiderman said in a statement. "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."
It is unclear how many workers will share in the $500,000. Per Se also agreed to hire a monitor for its labor practices, improve training, and make it easier for customers to complain about suspected labor violations.
In a statement, Per Se said it had been unaware of the state law, and called its failure to properly describe the service charge an "unintentional oversight." It said it updated the language in September 2012 and has since been in compliance.
The state said its probe did not find that Per Se was aware of the violations. It also said wait staff are paid $16.60 to $28.00 per hour, and eligible for gratuities and overtime.
Per Se carries four stars, the highest rating, from The New York Times.
Other well-known New York restaurateurs including Mario Batali, Daniel Boulud and Jean-Georges Vongerichten have also been accused in recent years of cheating workers out of tips.
Batali, whose restaurants include Del Posto and Lupa, in 2012 reached a $5.25 million settlement in one case.
Keller's company, Thomas Keller Restaurant Group, has more than a dozen restaurants and stores in New York, California and Las Vegas, including The French Laundry in Napa Valley, Bouchon Bistro and Bouchon Bakery.
Reporting by Jonathan Stempel in New York; Editing by Alan Crosby