US Department of Labor recovers $125K in back wages for 23 workers after finding Lexington pub, restaurant operated invalid tip pool

Employer:                             Krafty Draft Brew Pub LLC

                                                269 Charter Oak Road 

                                                Lexington, SC 29072

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found the Lexington pub and restaurant distributed earned tips with traditionally non-tipped employees, such as dishwashers and cooks and, by doing so, operated an invalid tip pool. The division learned that the employer used earned tips to cover most of the servers’ gross pay and failed to pay a cash wage of at least $2.13 per hour directly to tipped employees as required. These actions violated the Fair Labor Standards Act, as did the employer’s failure to keep accurate record of tips earned and hours worked by employees. 

Back wages recovered:         $125,819 in back wages for 23 workers

Quote: “Pay practices a business chooses to use must meet legal requirements. In this case, we found that — while allowing some employees to take home more than federal minimum wage — Krafty Draft Brew Pub ignored its obligation to pay their share of its workers’ income and passed that responsibility to its customers,” explained Wage and Hour Division District Director Jamie Benefiel in Columbia, South Carolina. “Employers unsure of their legal obligations should contact their local Wage and Hour Division office for assistance. That’s the best way to ensure that they pay employees all of their rightful wages.”

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 its search tool to learn if you are owed back wages collected by the division. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android and iPhone Timesheet App available for free in English or Spanish.