US Department of Labor recovers $16K in back wages, liquidated damages for 24 workers after finding restaurant owner kept portion of employees’ tips

Employer:                              Jay and Krupa Inc., operating as Subway

                                                414 Gallatin Pike South

                                                Madison, TN 37115                           

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found the owner of a Madison Subway restaurant kept a portion of the employees’ earned credit card tips illegally, a violation of the tips provisions of the Fair Labor Standards Act. The owner believed incorrectly that he could participate in the tip pool since he also worked at the restaurant. 

The division also determined the company did not maintain accurate time and tip records.

Investigators also learned Jay and Krupa Inc. employed two minor-aged employees but failed to have records that verified their birthdates, an FLSA child labor violation.

Back wages and liquidated damages recovered: The division recovered $16,666 in back wages and liquidated damages for 24 workers.                                  

Quote: “When it comes to employees’ tips, the bottom line is simple: tips are the property of employees who earn them. Under no circumstance may employers withhold workers’ tips,” explained Wage and Hour Division District Director Lisa Kelly in Nashville, Tennessee. “Restaurant industry workers often rely on tips to make up the difference for the typically low hourly wages and to make ends meet. Employers who deprive workers of hard and legally earned money may face costly consequences for violating federal law.”

Background: Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. Learn more about the Wage and Hour Division, including the agency’s restaurants compliance assistance toolkit and an overview about the FLSA protections for restaurant workers. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android and IOS Timesheet App for free in English or Spanish.