Servers forced to share tips with bosses get big payout in Pennsylvania, feds say

Servers were illegally required to share their tips with managers and supervisors at a Pennsylvania restaurant and distillery, according to federal officials.

That was one of several violations an investigation into Wigle Whiskey and Pittsburgh Distilling Co. uncovered, according to a June 29 news release from the U.S. Department of Labor’s Wage and Hour Division.

Authorities say the business allowed bosses to split the shared “tip pool,” which is illegal under the Fair Labor Standards Act.

Wigle Whiskey’s co-founder and owner told McClatchy News the restaurant did not intentionally violate this rule, which went into effect in December 2021. Rather, she says this was a “good faith dispute” over something that was debated nationally for two years.

“The new rule adopted technical definitions of a manager and when a manager who served customers could share in a tip pool,” the restaurant statement says. “We believed we were properly and fairly allocating tips to employees that were actively serving customers. When we learned the Department of Labor had a different interpretation, we immediately changed our method of allocating tips.

“We believe that employees who spend the majority of their time serving customers should share in tips, to the extent those tips were earned while serving customers,” the statement continued. “Regardless of title, our employees, throughout Covid, were often servers, many times carrying the weight of others who were not able to work throughout the pandemic.”

The Department of Labor recovered $38,951 for 41 workers at the restaurant in Pittsburgh.

The investigation also found that tipped employees were shortchanged overtime wages, officials said.

“Investigators found Wigle Whiskey calculated the tipped employee overtime rate based on their cash wage of $4 per hour instead of the federal minimum wage of $7.25 per hour, as federal law requires,” according to the news release. “The employer also underpaid managers for overtime hours when they failed to include wages received by managers from the improper tip pool in overtime calculations. These practices violated the FLSA’s overtime regulations.”

The Fair Labor Standards Act requires tipped workers make at least $2.13 per hour in “direct wages” — as long as tips add up to the full federal minimum wage of $7.25 per hour.

The Wage and Hour Division says it completed over 4,200 investigations into food service establishments in 2021, and more than $34 million in back wages were recovered for more than 29,000 workers across the country.

“Food service workers rely on their hard-earned tips to make ends meet. Restaurant employers must understand that keeping workers’ tips or diverting a portion of these tips to managers or supervisors in a tip pool is illegal,” District Director John DuMont, in Pittsburgh, said in a statement. “As restaurants struggle to fill the positions they need to keep their doors open, those who deny workers their rightful wages are likely to find it more difficult to retain and recruit workers than those employers who abide by the law.”

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