The U.S. Department of Labor (DOL) has recently unveiled a disconcerting revelation about the operations of coffee shops in Kentucky. Investigators from the Wage and Hour Division discovered that the operator of four local coffee shops permitted two managers to partake in the servers’ tip pool – a practice strictly prohibited by the Fair Labor Standards Act.
34 Workers Owed Back Wages and Liquidated Damages
In light of this egregious violation, the DOL has recovered a total of $72,564 in back wages and liquidated damages owed to 34 workers across these establishments.
District Director Karen Garnett-Civils in Kentucky, expressed sternly, “Under no circumstance may employers or supervisors participate in a tip pool.” She reiterated that the Fair Labor Standards Act unequivocally bars managers or supervisors from retaining any portion of an employee’s tips. She urged employers to seek guidance from the DOL’s free resources or reach out to their staff for clarification on their legal obligations.
The business, primarily a catering and event company, extends its operations to three other limited-service coffee shops and bakery locations in Kentucky. Unfortunately, this discovery follows investigations into three other local coffee shops where similar illegal practices were unearthed, involving the improper sharing of employee tips with managers.
Conclusion
This alarming revelation not only emphasizes the importance of understanding labor laws but also serves as a stark reminder for businesses, particularly those in the service industry, to meticulously adhere to regulations. The improper handling of employee wages and tips not only breaches federal laws but also leads to significant financial repercussions. Ensuring compliance with legal requirements isn’t just a matter of legality; it’s fundamental in fostering a fair and equitable workplace for employees, upholding ethical business practices, and steering clear of costly penalties.