Diners in sit-down restaurants pay for their meals and usually leave something extra for their waiter, known as a tip or tip. A restaurant decided to withhold tips from staff and faces a hefty fine.
What happened: North Carolina-based Jay’s Kitchen was ordered to pay employees $157,287 after an investigation found the restaurant violated the Fair Labor Standards Act.
The restaurant owner, Mugen Inc., “denied workers full wages by withholding part of their earned tips.”
The six-figure fine will be shared among 65 affected employees at the restaurant, which specializes in Asian-American cuisine.
Jay’s Kitchen was also found to violate child labor and record retention laws.
The fines and the verdict came according to the US Department of Labor Business Insider.
“Tipped hospitality workers rely on their hard-earned tips to make ends meet,” the labor district chief said Richard Blaylock said. “Tips are the employee’s property and under no circumstances should employers keep any part of their employees’ tips.”
The child labor law violations came from three 15-year-old workers who worked more hours in a day, a school week, and beyond certain hours than the rules allowed. Fines for the child labor laws were $1,915.
Mugen, which owns five other restaurants across North Carolina, told Business Insider that it “fully cooperated” with the investigation.
Why it matters: The state minimum wage is only $7.25 an hour.
According to the report, the restaurant owner said he deducts credit card fees for tips from waiters’ salaries.
“This error resulted in some of our tipped employees not receiving the full tip amount that was due to them,” the restaurant owner said.
See also: Darden Restaurants…
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