An investigation by the Department of Labor’s (DOL) Wage and Hour Division (WHD) resulted in the recovery of $117,710 in back wages and damages for 70 workers of a restaurant group in Hawaii.
D.K. Restaurant Group violated the Fair Labor Standards Act (FLSA) when it forced servers to share their tips with managers, the DOL reported June 30. In addition to the $117,710, the group was ordered to pay $8,580 fine for "the willfuful nature of its violations," the DOL states in the report. D.K. Restaurant Group operates D.K. Steak House in Honolulu and Sansei Seafood Restaurants and Sushi Bars in Kapalua, Kihei and Waikoloa, according to the report.
“Customers' tips to the restaurant staff for good service are the private property of those workers in the tip pool, such as servers, bartenders and other front-line workers,” Wage and Hour Division District Director Terence Trotter in Honolulu said in the report. “Any attempt by management to misuse a portion of these tips violates tipped workers’ wage rights.”
WHD investigators determined that after D.K. cut managers' salaries by 25% or more, it made servers give a portion of their tips to compensate managers for the salary reductions. D.K. attributed the salary reductions to the loss of business during pandemic-related closures, according to the report.
Trotter said not only will restaurant operators who illegally withhold wages from workers struggle to keep staff at a time of worker shortages, they will also risk investigations and penalties for violating federal law.
“The U.S. Department of Labor is determined to protect workers’ right to keep all their earnings and prevent employers from gaining a competitive advantage by reducing their labor costs," Trotter said in the report.
