US Department of Labor recovers $105K in back wages, damages for 28 Grand Rapids restaurant workers after owner withheld tips

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

                              Jixi Qiu, owner

                              5039 28th St. SE

                              Grand Rapids, MI

Action:           Fair Labor Standards Act consent judgment and order

Courts:           U.S. District Court for the Western District of Michigan

Findings:        A federal court ordered The Saucy Crab and its owner Jixi Qiu to pay $105,000 in back wages and liquidated damages to 28 former employees of the Grand Rapids restaurant that ceased operating in October 2022.  

Entered on Oct. 3, 2024, the consent judgment and order resolves a complaint filed by the U.S. Department of Labor on July 14, 2023.

An investigation by the department’s Wage and Hour Division found the restaurant and Qiu violated provisions of the Fair Labor Standards Act when they illegally used a tip pool and denied employees correct minimum and overtime wages from at least August 2020 through October 2022.

The court also ordered the Saucy Crab and Qiu to pay an additional $10,000 in civil money penalties for its willful FLSA violations. The consent judgment restrains and forbids the restaurant and Qiu from future violations of the FLSA’s tip pooling, minimum wage, overtime and retaliation provisions.                                                 

Quotes: “The Saucy Crab’s owner took tips from servers and bartenders to benefit his company and denied servers, cooks and dishwashers their fully earned wages. This judgment puts those wages back in the hands of former employees shortchanged by Qiu and the restaurant,” said Wage and Hour Division District Director Mary O’Rourke in Grand Rapids, Michigan. “The Department of Labor will always protect the rights of workers in all industries to receive the pay they have rightfully earned.” 

“The Saucy Crab joins a list of U.S. restaurant employers we’ve found shortchanging workers by misusing some of their tips,” said Regional Solicitor of Labor Christine Heri in Chicago. “Federal law forbids employers from keeping employees’ tips - either direct from customers or shared in a tip pool - for any purpose.”

Attorney Haley R. Jenkins in the department’s Regional Office of the Solicitor in Chicago litigated the case.

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