South Carolina restaurant owed workers $624K in tips, operated illegal tip pool

CHARLESTON, S.C. (WCBD) — The U.S. Division of Labor mentioned Monday that hundreds of {dollars} in ideas have been recovered for employees at a downtown Charleston restaurant who had been compelled to take part in an unlawful tip pool.

In keeping with the Labor Division, administration at 167 Uncooked on King Avenue “required tipped workers to share ideas illegally,” splitting the funds between “administration and different usually non-tipped workers.” The restaurant additionally “did not pay tipped workers the distinction between their direct wages and the federal minimal wage” and paid lower than the federal requirement for time beyond regulation charges.

The investigation discovered that 92 employees had been shortchanged by $624,017.

Jamie Benefiel, district director of the Wage and Hour Division mentioned such violations “are widespread within the restaurant trade, and so they can shortly add as much as expensive penalties.”

Benefiel mentioned “restaurant trade employers should know and adjust to federal necessities to assert the tip credit score” and that “retaining and recruiting employees is harder when employers fail to respect employees’ rights and pay them their full wages.”

The restaurant issued the next assertion:

“In 2021, 167 Uncooked King Avenue LLC entered right into a voluntary settlement with the U.S. Division of
Labor concerning its tip-pooling process. The Division of Labor discovered the method to be in battle
with provisions of sure laws.

“A tip pool was established to incorporate and compensate our group members who’re integral to a optimistic
eating expertise at our restaurant. Earlier than establishing the pool, we sought recommendation from authorized counsel
and had been informed that it was authorized and acceptable to take action. Months later, nevertheless, the Division of
Labor concluded that these procedures had been in direct violation of sure federal pointers. The
Division started a full investigation and decided that whereas we had not deliberately violated any
regulation, we had as an alternative relied upon incorrect authorized recommendation. The total particulars of this had been disclosed to
our group members and compensation was dealt with accordingly. We absolutely cooperated with the
Division of Labor to determine new procedures throughout the Division’s pointers and took the
obligatory steps to appropriate the misallocation of ideas. It is very important word that the house owners of 167 Uncooked
King Avenue LLC by no means shared in or participated within the former tip pool.

“We proceed to prioritize our group members and selecting to enter this voluntary settlement with the
Division final yr ensured that our valued group members proceed to be well-compensated inside
the framework of evolving federal pointers.”

If you happen to suppose you could be owed again wages, click on right here for extra info on the right way to declare them.

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