CHARLESTON, S.C. (WCBD) – The U.S. Department of Labor on Monday announced thousands of dollars in tips recovered for workers at a restaurant in Charleston, South Carolina, after they had been forced to participate in an illegal tip pool.
The management at 167 Raw on King Street “required tipped employees to share tips illegally,” splitting the funds between “management and other typically non-tipped employees,” according to the Department of Labor (DOL). The restaurant also “failed to pay tipped employees the difference between their direct wages and the federal minimum wage” and paid less than the federal requirement for overtime rates.
The investigation found 92 workers were shortchanged a total of $624,017 as a result of the illegal financial structure.
Jamie Benefiel, a district director of the DOL’s wage and hour division, explained that such violations “are common in the restaurant industry, and they can quickly add up to costly consequences.”
Benefiel went on to say “restaurant industry employers must know and comply with federal requirements to claim the tip credit,” and that “retaining and recruiting workers is more difficult when employers fail to respect workers’ rights and pay them their full wages.”
In response, 167 Raw issued a statement claiming that the operators established the tipping policy to ensure compensation for “team members who are integral to a positive dining experience,” and even sought advice from legal counsel, who informed them the practice would be “legal and appropriate.”
“Months later, however, the Department of Labor concluded that these procedures were in direct violation of certain federal guidelines,” the restaurant said in a statement. ” The Department began a full investigation and determined that while we had not intentionally violated any regulation, we had instead relied upon incorrect legal advice.”
The restaurant is fully cooperating with the Department of Labor, according to the statement.
Workers who believe they may be owed back wages are encouraged to visit the DOL’s official site for more information, and resources to help claim them.