Tennessee Restaurant Chain To Pay $188,728 in Back Wages After U.S. Department of Labor Uncovers Minimum Wage Violations
KINGSPORT, TN – After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), Cypriana Inc. – operating as Mad Greek International Café – will pay $188,728 in back wages to 65 employees. The investigation found minimum wage and recordkeeping violations of the Fair Labor Standards Act (FLSA) at two Tennessee locations in Kingsport and Johnson City.
The WHD investigation determined Cypriana retained a percentage of servers’ tips illegally to use for business expenses and to pay the hourly wages of hosts and bussers. The FLSA does not allow employers to keep servers’ tips. Under certain circumstances, the law does allow employers of tipped workers to take credit for tips the employees receive toward the employer’s obligation to pay those workers the federal minimum wage of $7.25 per hour. The violation found in this case disallows Cypriana’s ability to take that credit, resulting in the employer owing the full federal minimum wage to servers. In addition, WHD found that the employer failed to maintain the records showing the dates of birth for four minor employees, an FLSA recordkeeping violation.
“We strongly encourage employers to contact the Wage and Hour Division with questions regarding tip credit rules or any other wage requirements so they can meet their legal obligations,” said Wage and Hour Division District Director Nettie Lewis, in Nashville, Tennessee. “This investigation’s outcome reminds all employers to review their pay practices to ensure they are paying their workers as the law requires, and shows that the U.S. Department of Labor remains committed to leveling the playing field for employers who play by the rules.”
The Department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos and confidential calls to local WHD offices.
For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers that discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/agencies/whd.
WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce. WHD enforces federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act. WHD also enforces the paid sick leave and expanded family and medical leave requirements of the Families First Coronavirus Response Act, the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis-Bacon Act and the Service Contract Act and other statutes applicable to federal contracts for construction and for the provision of goods and services.
The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.