Department of Labor investigation recovers $60K in back wages, damages from restaurants that shared tips illegally with managers, supervisors

Employer:                                         

Rincon Brewery Inc.

4100 Telegraph Road

Ventura, CA 93003

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found Rincon Brewery — operator of three California restaurants in Carpinteria, Santa Barbara and Ventura — allowed managers and supervisors to keep a portion of customers’ tips, a violation of the Fair Labor Standards Act. They determined the employer distributed tips to employees based on job classifications, with non-tipped managers keeping the highest percentage of tips.

Back Wages/Liquidated Damages Recovered:     

$30,439 in back wages for 105 employees

$30,439 in liquidated damages for 105 employees

Quote: “Food service industry employers must know that tips are the property of tipped employees who earn them,” said Wage and Hour Division Assistant District Director Siriporn Poondee in Los Angeles. “Under no condition may restaurants withhold tips earned by employees, including sharing any portion of employees’ tips with managers or supervisors.”

Background: In fiscal year 2022, the Wage and Hour Division recovered more than $27 million for more than 22,000 workers in the food service industry. In 2022, the Bureau of Labor Statistics reported near record numbers of job openings and workers in the accommodations and food services industry quitting their jobs. 

The Wage and Hour Division protects workers against retaliation and has regulations that prohibit retaliation, harassment, intimidation or adverse actions against employees that assert their worker rights. Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. Workers and employers with questions can contact the division’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.

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