Federal officials say servers were illegally required to share their tips with managers and supervisors at a Pennsylvania restaurant and distillery.
It was one of several violations uncovered by an investigation of Wigle Whiskey and Pittsburgh Distilling Co., according to a June 29 press release from the U.S. Department of Labor’s Wage and Hour Division.
Authorities say the company allowed bosses to split the shared ‘tip pool’, which is illegal under the Fair Labor Standards Act.
The co-founder and owner of Wigle Whiskey told McClatchy News that the restaurant did not intentionally violate this rule, which came into effect in December 2021. Instead, she says it was a “dispute of good faith” on something that has been debated nationally for two years.
“The new rule adopted technical definitions of a manager and when a manager serving customers could share a tip pool,” the restaurant’s statement said. “We believed we were properly and fairly awarding tips to employees who were actively serving customers. When we learned that the Department of Labor had a different interpretation, we immediately changed our tipping method.
“We believe that employees who spend the majority of their time serving customers should share tips, to the extent that such tips were earned serving customers,” the statement continued. “Whatever their title, our employees throughout Covid were often servers, often carrying the weight of others who were unable to work during the pandemic.
The Department of Labor recovered $38,951 for 41 workers at the Pittsburgh restaurant.
The investigation also found that tipped employees were being denied overtime pay, officials said.
“Investigators found that Wigle Whiskey calculated the employees’ overtime rate based on their cash wages of $4 per hour instead of the federal minimum wage of $7.25 per hour, as the ‘requires federal law,’ according to the press release. “The employer also underpaid overtime to managers when it failed to include salaries received by managers from the improper tip pool in the calculation of overtime. These practices violated FLSA overtime regulations.
The Fair Labor Standards Act requires tipped workers to earn at least $2.13 an hour in “direct wages” – as long as the tips total the federal minimum wage of $7.25 an hour.
The Wage and Hour Division says it conducted more than 4,200 investigations of food service establishments in 2021 and more than $34 million in back wages were recovered for more than 29,000 workers across the country. country.
“Food service workers rely on their hard-earned tips to make ends meet. Restaurant employers need to understand that it is illegal to withhold tips from workers or to divert a portion of those tips to managers or supervisors in a tip pool,” said District Manager John DuMont, Pittsburgh, in a press release. “As restaurants struggle to fill the positions they need to keep their doors open, those who deny workers their legitimate wages are likely to have a harder time retaining and recruiting workers than law-abiding employers. “