US Department of Labor recovers $62K for workers at five Hawaii restaurants, employers denied overtime, kept tips illegally

HONOLULU –The U.S. Department of Labor recovered $62,908 in back wages and liquidated damages for 42 workers after an investigation found the operators of five Hawaii restaurants denied them overtime pay and allowed a manager and other employees to take a portion of the workers’ tips illegally.

Investigators with department’s Wage and Hour Division found Elizabeth Diaz and Antonio Aguilar Aguirre – joint owners of four Pacos Tacos Cantina and Lunch Wagon restaurants on Kauai, and one on Oahu – owed workers $12,682 in overtime wages earned for hours worked over 40 in a work week. Diaz and Aguirre also permitted a manager and others at the restaurants to take as much as $18,771 from tips earned by the workers. Both actions violated the Fair Labor Standards Act.

Federal law forbids an employer from keeping workers’ tips and prohibits managers and supervisors from taking tips employees receive, including through tip pools. These restrictions apply even if the employer pays tipped workers hourly rates equal to, or above the full minimum wage. 

In addition to the recovery of back wages and liquidated damages, the division assessed $10,000 in civil money penalties due to the nature of the employers’ violations.

“Just as there are required quality standards for the food we consume at restaurants, there are also federal labor standards for workers in this industry. Federal laws require overtime pay for hours worked in excess of 40 in a workweek and that tipped employees retain the tips they’ve earned,” said Wage and Hour Division District Director Terence Trotter, in Honolulu. “Employers should take advantage of the many educational tools we offer in order to avoid costly violations such as those found in this case.”

In fiscal year 2021, the Wage and Hour Division conducted 4,237 investigations in the food service industry, recovering $34.7 million in back wages for more than 29,000 employees nationwide.

The Bureau of Labor Statistics projects that 958,000 food and accommodation services workers left their positions in December 2021. BLS also projects about 41,400 openings for food service managers each year, on average, from 2020 to 2030.

“As more workers choose to leave food industry jobs, employers who deny workers their rightful wages may find themselves unable to retain and recruit the people they need to operate their businesses,” Trotter added. “In turn, employers who comply with the law will have the advantage as many workers have choices when it comes to finding employment.”

Learn more about the Wage and Hour Division and a search tool to use if you think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.