US-based Ginza Japanese Restaurant has repaid 75 server employees a total of $262,000 (£209,220) after forcing them to share their tips with chefs, owners and managers.
An investigation by the US Department of Labor’s (DOL) Wage and Hour Division found that the sushi restaurant, located in Fort Myers, Florida, required staff to tip sushi chefs, owners and managers based on the servers’ total sales. This made their tip pool invalid under federal law.
In addition, the business was unable to account for $22,000 (£17,568) in tips that it had allegedly withheld and had no records to prove that this money had been paid to servers or other employees. It had also failed to pay a regular rate and overtime to dual-occupation staff with separate job roles.
According to the DOL, this was a violation of the Fair Labor Standards Act (FLSA), which prevents employers from requiring tips to be shared, as well as establishing minimum wage, overtime pay, record keeping and youth employment standards in the private sector, as well as federal, state and local governments.
The DOL recovered $262,322 (£209,477) in back wages and liquidated damages for Ginza Japanese Restaurant employees impacted by the violations.
Nicolas Ratmiroff, district director in Tampa, Florida for the DOL Wage and Hour Division, said: “Tips are the property of the employees who earn them. No employer has the right to keep any tips unless they are given directly to the manager who directly serves a customer.
“This case shows that when an employer handles tip pools improperly, they may no longer apply a tip credit, which can lead to an employer owing employees significant back wages and damages. Wage and Hour Division investigators recovered more than $27 million [£21.6 million] for more than 22,500 workers in the food service industry in 2022.”
Ginza Fort Myers, which operates as Ginza Japanese Restaurant, was contacted for comment prior to publication.