Department of Labor files suit after investigation found Grand Rapids restaurant owner withheld employees’ tips

Employer:      The Saucy Crab Grand Rapids LLC operating as The Saucy Crab

                        5039 28th St. SE

                        Grand Rapids, MI

Investigation findings: On July 14, 2023, the Department of Labor filed suit against The Saucy Crab Grand Rapids LLC and owner, Jixi Qui, in the U.S. District Court for the Western District of Michigan seeking back wages and liquidated damages for 26 workers. An investigation by the department’s Wage and Hour Division found the restaurant used a tip pool illegally and denied employees correct minimum and overtime wages.

The department alleges the company owes $75,402 in back wages to the 26 workers after investigators found the company violated provisions of the Fair Labor Standards Act when they did the following:

• Included the owner who served as manager, along with cooks and dishwashers in a tip pool customarily used for servers and bartenders.
• Made illegal deductions from servers’ pay for uniforms, aprons, name tags, and lost items such as crab crackers, scissors and oyster forks, resulting in employees failing to earn minimum wage.
• Failed to pay servers time and one-half their cash wage in periods when the employer claimed a tip credit. The employer should have paid time and one-half the employees’ regular hourly rate.
• Paid cooks a flat rate, denying them overtime for hours over 40 in a workweek.
• Failed to maintain any payroll records for at least two cooks.
• Failed to pay one cook any wages.
• Did not maintain accurate time records for employees from at least August 2020 until October 2022.

The suit also seeks an equal amount in liquated damages for employees and an injunction barring Qui from violating the FLSA in the future.                                               

Quote: “Our investigation found the owner of the Saucy Crab restaurant abused the rights of their employees by illegally taking tips from customers intended for servers and bartenders and by denying servers, cooks and dishwashers their fully earned wages,” said Wage and Hour Division District Director Mary O’Rourke in Grand Rapids, Michigan. “The Department of Labor will fight to protect the rights of restaurant industry workers who, in addition to being among the nation’s lowest paid people, may be vulnerable to wage theft because they might not know their rights and protections or be reluctant to exercise them.”

Background: The department’s Quick Service Restaurants Compliance Assistance Toolkit explains wage laws for the industry. Learn more about the Wage and Hour Division.