PORTLAND, Ore. (KOIN) — Oregon restaurants are under scrutiny by the Department of Labor, accusing some of improper tip distribution.
Officials said one chain, Pizzicato, broke the law by tipping out upper management. They’re now being compelled to pay over half a million dollars. However, the owners of the pizza chain said they did not know that they were doing anything wrong and wish the law was more clear.
According to a 2018 labor law, managers and supervisors are prohibited from being included in the tip pool. Owners of Pizzicato said the law is confusing.
“If we knew we were doing something wrong, we would have never done it,” Pizzicato owner Marc Frankel told KOIN 6 News. “It’s just not us.”
DOL’s Wage and Hour District Director Katherine Walum in Portland explained what the accusation against Pizzicato boils down to.
“They were improperly, illegally tipping out managers from the tip pool at various locations, 11 locations in this case,” Walum said.
Pizzicato isn’t alone, either. The DOL found McMenamins was in violation as well, owing staff $800,000. However, McMenamins isn’t being compelled to pay. Officials said the DOL doesn’t have the resources to pursue the McMenamins case. Instead, staff were given a letter from the DOL about the investigation to see civil action on their own. Fuel Cafe is also under investigation.
“It doesn’t make a lot of sense. It, you know, makes you feel helpless,” said Sam Carter, a former McMenamins employee. “It makes you feel like does anyone care?”
Carter said the allegedly illegal tipping practice was done at multiple locations and he was disappointed with the lack of action toward the restaurant group.
“yeah, it feels very unfair. Like they’d ask you to do what they want and get away with.”
Pizzicato had been facing a payment of $2 million. However, they settled out of court and are now ordered to pay their 367 employees $270,101 in back wages and $270,101 in liquidated damages, as well as $29,797 in legal penalties.