SUMMERVILLE – A former driver for a Summerville Restaurant claims his vehicle costs should have been reimbursed by his employer, and when they weren’t, he violated federal wage laws, in a lawsuit that could spill over to the growing delivery industry of food in the area.
Donald Nicholas Craven filed the federal lawsuit against Crazy Fish SC LLCwhich operates the Mad Fish sushi and hibachi restaurant on Trolley road. Craven said in documents filed in United States District Court in Charleston that he and other drivers had to cover their own gas, maintenance, insurance, and other work-related expenses, which caused their wages to fall below minimum wage.
Instead of reimbursing drivers for their expenses or at a kilometer rate specified by the Internal Revenue Servicethe alleged lawsuit, owner of Mad Fish Xin Lin paid them $1 per delivery – an amount Craven said was well below actual costs. And while Mad Fish charged its customers a delivery surcharge, the charges were not passed on to the drivers.
“Because of automobile and other work-related expenses … (the drivers) were deprived of the minimum wage guaranteed to them by the (Fair Labor Standards Act),” the lawsuit alleged.
He added the Mad Fish reimbursement formula of $1 per delivery “resulted in an unreasonable understatement of the automobile expenses of delivery drivers … causing systematic violations of minimum wage laws”.
Craven, who is represented by rocky hill lawyer Jacob Modlais seeking back wages, unspecified damages and legal fees, and he asked a judge to approve the lawsuit as a class action covering other Mad Fish delivery drivers between 2019 and 2022.
Lin, who planned to represent himself in the case, denied any wrongdoing in a court filing this week. But magistrate Marie Gordon Baker told the owner of Mad FIsh that he had to hire a lawyer because the lawsuit involved a corporation. The restaurant has up to June 30th to file an official response.
Ultimately, the case may come down to whether a judge thinks the $1 by reimbursement is reasonable, according to the Fisher Phillips law firm specializing in labor disputes and not involved in the Mad Fish complaint.
“Employers are permitted to reimburse employees who use their personal vehicle for work to a ‘reasonable approximation of the actual expenses incurred,'” according to the 2020 guidelines of the US Department of Labor, Fisher Phillips said in a blog post. “This means that employers do not need to reimburse employees at the IRS mileage rate to meet their obligations under federal wage and hour laws. »
Fisher Phillips said “there has been an influx of litigation” in recent years over how delivery drivers should be reimbursed, and federal courts have been divided over which method employers should use to determine their liability.
“Most federal courts have found that employers are not obligated to reimburse the IRS rate and that a reasonable approximation of expenses is permitted,” the law firm said, adding that the Labor Department’s opinion “will likely be relied upon by judges facing litigation over mileage reimbursement.”
No court date has been set in the Mad Fish case.
While restaurant delivery services have been around for years, the industry has become highly specialized and competitive, with demand skyrocketing during the COVID-19 pandemic. A recent McKinsey & Co. report shows that the global takeaway meal market is now a $150 billion– year-old company and industry leader DoorDash this month saw 35% growth in first-quarter revenue, suggesting that the popularity of these services will continue.