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Pancake Restaurant Must Refund Tips Taken From Waitstaff

Tips Wrongfully Taken From Waitstaff

Wage and hour law violations truly come in all shapes and sizes.  While the most common issues that we hear of are employees being misclassified as independent contractors or employers’ failure to compensate their employees for all hours worked, employees should always be wary of any suspicious pay practices at their job.

To wit, last week, in Kalamazoo, Michigan, two Sophia’s pancake restaurants agreed to a consent judgment entry with the United States Department of Labor, and will pay $245,000 in damages, including back pay wrongfully withheld from its workers over a 26 month period, from October 2010 through December 2012.  The award was comprised of not only $122,500 in back wages, but also an equal $122,500 in liquidated damages for various violations of the Fair Labor Standards Act. 


Most glaringly, Sophia’s was actually charging its employees to work at its restaurants.  The waitstaff was required to pay back to the restaurant $2 per hour out of tips that they earned.  Sophia’s also engaged in an assortment of the usual employer bad behavior – it failed to pay its employees for time worked before and after their scheduled shifts, paid flat salaries to kitchen staff regardless of hours over forty in a week, and retaliated against a worker who reported these practices and others to the Department of Labor.  

Astonishingly (or perhaps not so astonishingly), the owner of one of the restaurants was quoted as saying that the judgment was “not fair.”  At Tittle & Perlmuter, we are always surprised at how many employers believe that it is “not fair” that they be required to comply with minimum wage and overtime laws in their pay practices.  Fortunately for Sophia’s current and future employees, the February 16, 2016 consent entry also requires the restaurants to provide training to store management and employees on the Fair Labor Standards Act’s tip-pooling provisions, to ensure compliance with federal law.

The moral of the story is that employees should not just take the legality of their employers’ pay practices for granted.  Just last month, we resolved a collective action on behalf of 390 wireless store workers who were required to do work off-the-clock, at the end of their shifts.  

Contact a Wage and Hour Lawyer

If any aspect of your employer’s pay practices seem fishy to you, call the wage and hour lawyers at Tittle & Perlmuter.  We can answer your questions, and provide you the necessary guidance and representation when your rights as an employee are violated.