US Department of Labor recovers $196K after investigators found owners, managers of Subway restaurants in Washington illegally pocketed tips

Employer:      Jani Enterprises Inc., operating one Subway restaurant in Des Moines and one in Kent, WA

Keeyarah Enterprises Inc., operating two Subway restaurants in Lake Stevens, WA

Kian Enterprises Inc., operating three Subway restaurants in Marysville and one in Arlington, WA

Quantum Enterprises USA Inc., operating one Subway restaurant in Monroe and one in Sultan, WA

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found 10 Subway restaurants under common ownership allowed owners and managers to participate in employees’ tip pools, a violation of the Fair Labor Standards Act. Division investigators determined the illegal practice deprived 100 employees in Arlington, Des Moines, Kent, Lake Stevens, Marysville, Monroe and Sultan of the tips left by customers though credit card payments. Additionally, the employer manually adjusted employee timesheets to reduce hours worked to 40 hours or fewer per week and failed to combine hours worked at multiple locations to evade its legal obligation to pay overtime rates. 

Back Wages Recovered:       $80,528 in tips and $17,546 in overtime wages for 100 employees

                                                $98,074 in liquidated damages for 100 employees

                                                $22,017 in civil money penalties for the willful nature of the violations

Quote: “These Subway owners and managers willfully violated the Fair Labor Standards Act by underpaying employees and pocketing tips that did not belong to them,” said Wage and Hour Division District Director Thomas Silva in Seattle. “We encourage employers to review their practices and avoid the costly consequences of illegal actions.”

Context: Workers can use the division’s Workers Owed Wages search tool to see if they are owed back wages collected by the division. Employers and workers can contact the Wage and Hour Division for help and assistance at its toll-free number, 1-866-4-US-WAGE. Learn more about the Wage and Hour Division, including the agency’s restaurants compliance assistance toolkit and an overview about the FLSA protections for restaurant workers. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android and IOS Timesheet App for free in English or Spanish.  

This news release is also available in Spanish.