A small state chain of barbeque restaurants has found itself under quite a bit of scrutiny after a Department of Labor investigation found out they were not only withholding tips from their floor staff, but using those tips to then improperly pay other employees for overtime.
They claim to have changed, but the ramifications of this could be something they feel for quite some time.
It regarded the Texas BBQ chain Hard Eight and how it had failed to pay $867,000 to 910 employees across five locations.
The restaurant says this all came out of a misunderstanding of labor laws, but what a misunderstanding to have.
Those sources being purposely mismanaged tips and incorrectly paid overtime. They first didn't pay their employees their earned tips in full, then distributed the withheld amount among managers, who weren't paid a half-rate for overtime rather than the time and a half rate they were owed.
As Wage and Hour District Director Jesus A. Valdez wrote, "Roanoke Hard Eight violated the law by including managers in their tip pool. By doing so, the employer denied tipped workers some of their tips and managers proper overtime wages."
"As businesses struggle to find people to do the work needed to keep operating, employers would be wise to avoid violations or risk finding it even more difficult to retain and recruit workers who can choose to seek jobs where they will receive all of their rightful wages."
"At that time, our floor managers, who are deeply involved in the hands-on guest experience, were included in our tip sharing program," wrote Hard Eight's executive director Katie Gooch, "We learned about the new rules during a Department of Labor review and immediately changed our practices. We compensated all affected hourly employees and former employees. We also gave our floor managers a wage increase."
But it's fair to say that this never should have happened in the first place, and will certainly leave a blemish on the company's reputation. After all, it wouldn't be surprising if potential employees were a little apprehensive given this type of track record.
h/t: Insider
