Recent U.S. Department of Labor investigations have uncovered significant wage violations in the restaurant industry, resulting in back wage recoveries and penalties. Don’t let your business be next.
Restaurant owners violated federal tip pool provisions
NEW ORLEANS – A U.S. Department of Labor investigation found a restaurant kept tips earned by workers, in violation of federal wage law.
Investigators with the department’s Wage and Hour Division determined that the owners of the restaurant kept all tips intended for their employees that were paid by credit card, in violation of federal tip pooling provisions. The investigation recovered $81,681 in tips for 12 workers. Additionally, one employee was paid only in tips and denied $1,435 in earned minimum wage. The department also assessed $1,188 in civil money penalties.
“The law does not allow owners and managers to keep tips given by customers to service employees,” said Wage and Hour Division District Director Troy Mouton in New Orleans. “Tips belong to service workers. Employers that allow managers and owners to receive portions of those tips can face investigations or litigation. The Wage and Hour Division is available to provide compliance assistance to help employers understand their obligations to tipped employees.”
https://www.dol.gov/newsroom/releases/whd/whd20251118
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