US Department of Labor recovers $284K in back wages after investigation finds Albuquerque restaurant underpaid tipped workers

ALBUQUERQUE, NM –The U.S. Department of Labor has recovered $284,219 in back wages for 163 employees of Pappas Restaurants Inc. after an investigation found violations of the Fair Labor Standards Act’s minimum wage and overtime requirements.

The department’s Wage and Hour Division found the operator of Pappadeaux Seafood Kitchen included workers employed as oyster shuckers in its tip pool improperly. When an employer takes a credit for workers’ tips toward its obligation to pay them the federal minimum wage, only tipped workers may be included in tip pools. Illegally including non-tipped workers in this tip pool resulted in the division denying the employer’s use of that “tip credit,” meaning that every tipped worker was due the full minimum wage. The division also determined the employer calculated overtime pay incorrectly, resulting in additional violations.

“Restaurant industry employees are among the hardest working in our economy, and we must ensure they receive every penny of the wages they have earned,” said Wage and Hour District Director Evelyn Sanchez in Albuquerque, New Mexico. “The U.S. Department of Labor remains committed to protecting the wages of U.S. workers and maintaining a level playing field for employers who play by the rules. Other restaurants should use the outcome of this case as an opportunity to review their own pay practices, make sure they comply with the law, and avoid violations like those found in this case.”

Based in Houston, Pappas Restaurants Inc. is a family owned enterprise that operates branded restaurants in eight states including Pappadeaux Seafood Kitchen, Pappasito’s Cantina, Pappas Bros. Steakhouse, Pappas Seafood House, Pappas Bar-B-Q, Pappas Burger, Yia Yia Mary’s Mediterranean Kitchen, Dot Coffee Shop and Pappas Delta Blues.

For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.