A restaurant in Oregon said it would fire servers who didn't surrender their cash tips, a DOL investigation found.
The restaurant said it instead gave staff more reliable earnings by paying twice the minimum wage.
Cooks also weren't paid overtime wages, per the DOL. The restaurant was ordered to pay $375,000 to affected workers.
A sushi restaurant in Oregon threatened to fire servers who didn't surrender their cash tips, an investigation by the Department of Labor found.
The DOL's Wage and Hour Division found that Bonsai Teriyaki and Sushi in Medford, southwest Oregon, had collected and withheld cash and credit card tips earned by seven servers, and "warned them they'd be fired if they failed to surrender cash tips."
This violated the Fair Labor Standards Act, which stipulates that employers are not allowed to keep staff tips "under any circumstances."
In addition, Bonsai Teriyaki and Sushi failed to pay overtime wages to four cooks and sushi chefs, the DOL said.
The restaurant was ordered to pay a total of $375,233 in back wages and liquidated damages to the 11 affected workers, alongside paying a fine of just over $5,000. Each affected employee is set to get between $16,000 and $93,000, the DOL said.
The restaurant said in a Facebook post on Friday that it paid staff twice the average hourly minimum wage, which it said gave staff reliable earnings rather than "variable tip income" and enabled them to qualify for cars loans, home loans, and approval for apartments. It said it had also provided these wages during the pandemic, when it could only offer takeout and thus few customers left tips.
Bonsai Teriyaki and Sushi said that it had accepted the DOL's findings and was now in "full compliance."
"Because of the change to minimum wage plus tip we have lost a number of long-term employees who were better served and preferred the higher flat rate wage in lieu of the tips," it said.
The restaurant added that it had "always" paid overtime wages, but that some of the time cards had been destroyed.
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