Federal labor officials penalize Portland pizza chain over alleged wage theft

Jashayla Pettigrew
·2 min read

PORTLAND, Ore. (KOIN) — Federal officials have cracked down on a Portland pizza chain that has been accused of stealing tips from its employees.

On Wednesday, the U.S. Department of Labor reported that managers at Pizzicato have participated in tip pools despite the Fair Labor Standards Act — which prohibits any managers or supervisors from withholding tips from other staff members.

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According to DOL’s Wage and Hour Division, managers and supervisors can only keep tips when customers give the money directly to them for a service that they provided themselves.

“For example, a restaurant manager who serves their own tables may keep their own tips from customers they served but would not be able to receive other employees’ tips by participating in a tip pool,” the agency explained.

Officials said investigators found that tips were illegally distributed at the company’s 11 restaurants across the metro area. Pizzicato’s owners and CEO are now required to pay 367 employees $270,101 in back wages, along with $270,101 in liquidated damages.

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Additionally, the U.S. District Court for the District of Oregon has ordered the company to pay $29,797 in legal penalties.

“The resolution of this case should remind restaurant employers that the law forbids managers and supervisors to participate in tip pools and pocket a portion of employees’ tips,” Marc Pilotin, San Francisco’s Regional Solicitor of Labor, said in a statement.

Portland’s Wage and Hour Division District Director Katherine Walum added that wage theft is a prominent issue for restaurant workers, “who are some of the most vulnerable, low-wage workers in our community.”

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Eater Portland recently reported that McMenamins had also been accused of improperly distributing money. Officials said the Pacific Northwest food and hospitality chain withheld $800,000 from employees starting in mid-May 2019, and lasting at least through late October 2022.

KOIN 6 has reached out to both businesses for comment. This story will be updated.

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