US Department of Labor recovers $17K in restaurant workers’ tips after employer kept, used them to pay wages, expenses

Employer:                                          Smoky Hearth LLC

Investigation site:                             16607 Champion Way #100

                                                                     Sandy, OR 97055

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found Smoky Hearth LLC – operator of the Smoky Hearth Restaurant Bar and Grill – kept all tips earned by tipped employees and use them to pay wages and other business expenses, a Fair Labor Standards Act violation.

Back Wages Recovered: $17,087 in back wages for eight employees

Civil Money Penalties Assessed: $1,257 to address the willful nature of the violations

Quote: “Customers’ tips to restaurant staff belong to those who earned them, such as servers, bartenders and other front-line workers. Any attempt by an employer to keep these tips is a labor law violation,” explained Wage and Hour Division District Director Carrie Aguilar in Portland. “The U.S. Department of Labor is determined to protect workers’ rights to keep all their earnings, including tips, and prevent employers from paying wages with money that does not belong to them.”

Background: In fiscal year 2021, the Wage and Hour Division recovered more than $31.7 million in back wages for workers in the food service industry. Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. The division also offers numerous online resources for employers, such as a fact sheet on Fair Labor Standards Act wage laws overtime requirements.