DOL Hits Restaurant for $800k for Illegal Tip Withholdings

By Bryan Stillwagon

The Department of Labor continued its roundup of restaurants supposedly skirting wage and hour laws, recently reaching a settlement with a Texas-based restaurant for $650k in back wages and $150k in penalties to be split among 279 current and former wait staff. A DOL investigation found that not only was the restaurant retaining a portion of the employees’ tips to pay for business supplies (e.g, menus, glasses, trays), but it was also withholding percentages of tips as discipline for certain infractions. The DOL shows no sign of slowing its vigorous wage-and-hour investigations, especially in the restaurant industry, which, according to a DOL Administrator, “employs some of our country’s lowest-paid workers, who are vulnerable to exploitation.” If you have tipped employees, remember that tips are the property of the employee, and tips may only be pooled (shared) among employees who customarily and regularly receive tips (e.g., waiters, bussers, and bartenders, not cooks, dishwashers, or janitors).