Department of Labor Sues Restaurant Company for Tip Pool Violations

Federal law allows employers to claim a credit of $5.12 per hour for tipped employees. However, the arrangement must meet the strict guidelines set by the Department of Labor ("DOL"). If the arrangement does not meet all of the DOL's criteria, the tip pool can be deemed invalid and employees would then be owed for their unpaid minimum wages.

In this case, the DOL found that the restaurant company improperly retained a portion of the employees' tips. The company also denied overtime pay to employees who worked at more than one restaurant location when their hours totaled more than forty (40) hours in one workweek. Finally, the company required employees to work off the clock and overcharged the employees for their meals. The DOL is seeking to recover the employees' unpaid wages, tips and liquidated damages.

There are a number of ways that restaurants can violate the DOL's requirements for tipped employees. If you believe that your employer does not comply with the DOL's guidelines for tipped employees, you should consult with an attorney immediately.

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