Fancy Restaurant Kept $500K in Servers' Tips

One of America's ritziest restaurants has been ordered to give around 70 servers a total $500,000 for engaging in what New York Attorney General Eric Schneiderman calls some pretty lowly behavior: cheating servers out of their tips. The AG's office says Manhattan restaurant Per Se, which charges $310 for its "tasting menu," slapped a 20% "service charge" on the bills of private-dining client customers and, in violation of state law, used that money for general operational costs instead of giving it directly to the servers, the New York Daily News reports. The restaurant was also fined $100,000 and will be required to step up compliance with labor laws, reports the New York Times.

The settlement ensures that servers "will not continue to be cheated out of their hard-earned tips—tips that customers intended for them," Schneiderman said. In a statement to CNBC, the restaurant says the failure to pay the charge to servers was an oversight after state regulations on service charges changed in 2011. Per Se says workers were "never short-changed and no monies intended for employees were withheld," and the charge helped pay for "industry-leading wages" that average $116,000 a year for a waiter, including overtime and tips. (A Pittsburgh restaurant has banned tips but will start giving full-time servers benefits and a salary of $35,000 a year.)