A federal court has mandated The Saucy Crab and its owner, Jixi Qiu, to compensate 28 former employees with $105,000 in back wages and liquidated damages. This decision follows the cessation of operations by the Grand Rapids restaurant in October 2022.

The judgment was issued on October 3, 2024, resolving a complaint lodged by the U.S. Department of Labor on July 14, 2023. The department's Wage and Hour Division found that the restaurant and Qiu had breached Fair Labor Standards Act (FLSA) regulations by improperly using a tip pool and failing to pay correct minimum and overtime wages from at least August 2020 through October 2022.

Additionally, the court imposed a $10,000 civil money penalty on The Saucy Crab and Qiu for their deliberate violations of FLSA rules. The consent judgment prohibits future breaches related to tip pooling, minimum wage, overtime, and retaliation provisions.

Wage and Hour Division District Director Mary O’Rourke in Grand Rapids stated: “The Saucy Crab’s owner took tips from servers and bartenders to benefit his company and denied servers, cooks and dishwashers their fully earned wages. This judgment puts those wages back in the hands of former employees shortchanged by Qiu and the restaurant.” She emphasized that “the Department of Labor will always protect the rights of workers in all industries to receive the pay they have rightfully earned.”

Christine Heri, Regional Solicitor of Labor in Chicago, remarked: “The Saucy Crab joins a list of U.S. restaurant employers we’ve found shortchanging workers by misusing some of their tips.” She reiterated that "federal law forbids employers from keeping employees’ tips - either direct from customers or shared in a tip pool - for any purpose."

Attorney Haley R. Jenkins from the department’s Regional Office of the Solicitor in Chicago handled litigation for this case.

The Department of Labor offers resources such as the Quick Service Restaurants Compliance Assistance Toolkit to explain industry wage laws.