US Department of Labor recovers $198K for 20 bartenders from Dallas bars’ owner who illegally shared tips, violated minimum wage, overtime laws

DALLAS – Bartenders at two Dallas-area restaurants who depend on good tips in return for great service will recoup $197,902 in earnings after federal investigators found the establishments’ owner and operator forced them to share tips with non-tipped employees illegally.

The recovery follows an investigation by the U.S. Department of Labor’s Wage and Hour Division that discovered The Peak Inn LLC and Adair’s Saloon Inc. operated an illegal tip pool when the employers shared tips earned by 20 bartenders with the restaurants’ cooks. 

The division found the employer violated federal minimum wage and overtime provisions by not paying cooks at least the federally required $7.25 per hour for all hours worked and not paying them time-and-one-half their regular rate of pay for hours over 40 per workweek. Investigators also determined the employer did not combine an employee’s work hours when they worked as a bartender and a cook and when an employee worked at both restaurants. In addition, The Peak Inn and Adair’s Saloon failed to keep records required by law.

 “Like many workers, bartenders spend long days and nights on their feet in the hope that great customer service earns them good tips,” explained Wage and Hour Division District Director Jesus A. Valdez in Dallas. “The Peak Inn and Adair’s Saloon illegally withheld tips that are these bartenders’ property and shared them with non-tipped employees. Our investigation led to a significant recovery of hard-earned wages for 20 workers.”

The investigations are part of an ongoing food service industry initiative to identify wage violators, recover back wages and, when appropriate, assess damages and civil money penalties.

In fiscal year 2023, the Wage and Hour Division recovered more than $29.6 million in back wages for nearly 26,000 food service workers and assessed food service employers $6.1 million in penalties.

Owned by Joe Morales, the Peak Inn and Adair’s Saloon were both named among Dallas’ top 100 bars in 2023. 

The Wage and Hour Division enforces laws governing pay practices and other labor standards, including the Fair Labor Standards Act. 

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. The division protects workers regardless of immigration status and can communicate with workers and employers confidentially in more than 200 languages at its toll-free helpline, 866-4US-WAGE (487-9243).

Download the agency’s new Timesheet App, which is available in English and Spanish for Android and Apple devices, to ensure hours and pay are accurate.   

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