North Carolina restaurant that kept workers' tips ordered to pay $157,000, federal officials say
A North Carolina restaurant was ordered to pay over $150,000 in back pay to 65 staff members after federal investigators found workers weren't getting their full tips, while also discovering child labor and recordkeeping laws were violated.
The U.S. Department of Labor announced Tuesday Mugen Inc., operating as the Asian-American fusion restaurant Jay's Kitchen in Goldsboro, kept a percentage of their employees' tips, violating the Fair Labor Standards Act. By keeping the tips, officials said the restaurant lost its right to claim a tip credit and owed the workers the difference between their paid cash and the federal minimum wage of $7.25, which totaled to $157,287.
"Tipped workers in the food services industry rely on their hard-earned tips to make ends meet. Tips are the property of the worker and, under no circumstances, may employers keep any part of their employees’ tips," Richard Blaylock, district director of the Department of Labor's Wage and Hour Division, said in a statement.
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Investigators also found Mugen Inc. violated federal child labor laws by allowing three 15-year-old employees to work outside of permitted hours while school is in session. The employees worked more than three hours on a school day, more than 18 hours in a school week and worked past 7 p.m. As a result, the restaurant was given a $1,915 civil money penalty.
The restaurant also violated recordkeeping laws, the Department of Labor said, by failing to keep an accurate record of hours employees worked, provide the birthdates of employees under the age of 19 and home addresses of several employees.
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Along with Jay's Kitchen, Mugen Inc. owns five other restaurants in North Carolina.
Mugen Inc. admitted to the error in a statement to USA TODAY, saying the way the restaurant deducted the cost for collecting tips was not corrected. Most former employees were paid, and back wages for former employees that could not be located were paid to the Department of Labor, the statement said.
"At Mugen Inc. we value our employees, and they are part of our family. We are very sorry about the pay issues and sincerely apologize to our employees and former employees for it. We have taken actions to make it right and make sure it cannot happen again. We also appreciate the effort made by the US DOL in their diligent investigation which helped us identify and correct the problems," the statement read.
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This article originally appeared on USA TODAY: North Carolina restaurant Jay's Kitchen must pay for keeping tips: DoL
