GRAND RAPIDS, Mich. (Michigan News Source) – The U.S. Department of Labor announced three Michigan taco restaurants and their owner must pay $823,000 in back wages and damages for operating an illegal tip pool.
A federal court entered summary judgment last month against Jacob Hawley and three Barrio Tacos restaurants located in Grand Rapids, East Lansing and Traverse City. The restaurants must pay 177 employees $411,663 in back wages and another $411,663 in damages.
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The court found the restaurant required tipped employees to give some of their tips to managers. The managers then passed on those tops to non-tipped employees like kitchen staff. In addition, federal officials said the restaurants failed to pay tipped employees the federal minimum wage of $7.25 an hour, paid them incorrect overtime, and failed to keep accurate payroll records.
“If an employer claims the tip credit, tips may only be shared by employees who customarily receive tips as part of their wage compensation,” said Wage and Hour Division District Director Mary O’Rourke.
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