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Roy's restaurants ordered to pay back-wages, tips

By Erika Engle

LAST UPDATED: 03:07 p.m. HST, May 02, 2014

Some 326 tipped servers employed at Hawaii-based Roy's restaurants will be receiving $225,000 in back-pay.

Roy's Holdings Inc. has agreed to return $136,761 in tips and pay, as well as $88,424 in back wages to the employees for violations of the Fair Labor Standards Act.

The Wage and Hour Division of the U.S. Department of Labor found that the employer reduced the cash wage of the tipped employees below the minimum wage of $7.25 an hour, without allowing them to fully retain tips during the two year period that was investigated.

In Hawaii, employees who are likely to receive tips can legally be paid $7 an hour due to a 25-cent-an-hour tip credit in the law.

The DOL investigation found that the employer unlawfully required servers to pay a portion of their shift tips to non-tipped hourly kitchen staff that were paid at least the minimum wage.

However, the company disputes some of the Labor Department's contentions and could have contested the violations, "but at the end of the day ... Roy's was more than willing to make sure its past and present employees got what the government regulations said they should get," said Michael Lam, attorney for Roy's.

At no time has any tipped employee been required to surrender a portion of their tips for the benefit of other employees, Lam said. Rather, it is a voluntary practice by employees to acknowledge the "team effort" that co-workers make, he said.

Roy's also was penalized $1,550 for allowing a minor to load a trash compactor, which is considered hazardous for workers younger than 18.

The violation relates to an employee who as part of his job takes out the trash from the King's Shops location of Roy's restaurant on Hawaii island. The trash bin contains a compactor to which Roy's does not have a key and it was not turned on at the time the employee emptied the trash, Lam said. The employee was not placed in harm's way, but the company paid the fine nevertheless, he said.

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Mei mei wrote:
so glad to see the "tipped" workers win this!!!! shame on you ROYS!!!
on May 2,2014 | 12:08PM
what wrote:
More civilized societies like Japan and much of Europe do not tip and simply pay their workers a normal wage.
on May 2,2014 | 12:11PM
cojef wrote:
If you examine the tabs carefully, you will find service fee, which is supposed to be given to the servers or chambermaids in the case of a hotel, inn or hostel. Same with the restaurants. Thus when cash tip are given often it is returned or refused. Tabs can look like it is awfully expensive.
on May 2,2014 | 01:40PM
localguy wrote:
Not exactly true. In Japan it is culture, not the amount of money they are paid. Japanese are truly professional, taking a tip would be insulting. Some European countries also allow tipping. Do better work, earn a tip.
on May 2,2014 | 02:41PM
7146461887 wrote:
Japanese has a strong work ethic = true Japanese do not tip in Japan = true Service charge of 10% added to the bill in Japan = true Does the service charge go back to the employee = ???
on May 2,2014 | 04:42PM
loio wrote:
yeah, it's so much better in Europe and Japan, America is junk. right? would you be surprised to learn that Americans are better paid than Europeans? and who wants to live in Japan?
on May 10,2014 | 11:48AM
iwanaknow wrote:
Yike Roy, what were you thinking?
on May 2,2014 | 12:13PM
MizuInOz wrote:
I guess I will never eat at Roys. Must be rough to take care of your employees honestly, aye. Maybe the management didn't think the "tipped" employees did enough to earn the money. Wankers.
on May 2,2014 | 12:15PM
GooglyMoogly wrote:
This is a typical Hawaii reaction.
on May 2,2014 | 01:54PM
HanabataDays wrote:
Thank God.
on May 2,2014 | 02:57PM
HAJAA1 wrote:
You're not missing much.
on May 3,2014 | 02:03AM
eastside808 wrote:
The point of the witholding was sharing the tips with the non-tipped employees. What a nice thought considering the non-tipped workers work just as hard as those waiting tables. This is about collabrative effort and collabrative sharing. Of course there may be a few of the non-tipped individuals that only deserve their minimum wage, but they may be in the minority?
on May 2,2014 | 12:19PM
beachbum11 wrote:
Sharing the wealth? Where did we hear that before.
on May 2,2014 | 02:20PM
st1d wrote:
it's the wait staff that are penalized by i.r.s., taxes from tips being an estimate of the restaurant gross. kitchen or non-tipped staff are earning wages at a higher level than wait staffers and most likely do not report forced sharing of tips that they benefit from.

roy and other restaurant owners capitalize on this ruse of "sharing" effectively forcing (robbery by coercion) wait staff to subsidize roy's minimum wages paid to kitchen staff.

on May 2,2014 | 03:20PM
NamFouc wrote:
Speaking of tips, where is mandam allie at? Did she gradiate? It's time for the nut case righty to throw in the repeal of the Jones Act, as this would prevent this kind of action from happening,, How bout it Slom??
on May 3,2014 | 01:06AM
Mahalo wrote:
Roys is not alone!
on May 2,2014 | 12:25PM
st1d wrote:
accurate statement. other well known restaurants coerce wait staff into giving money to management as well as kitchen staff.

there are restaurants that require (force) wait staff to the floor at the restaurant start time, but, start the time clock for the wait staff only at their first table served.

restaurants also abuse wait staff by requiring (forcing) them to clean the restaurant when there are no customers, yet, the restaurant continues to pay at the tip credit rates.

on May 2,2014 | 06:14PM
808comp wrote:
Shame, Shame !!!!!
on May 2,2014 | 12:25PM
jmarie wrote:
Well this explains evrything, Roy's Hawaii Kai used to be the special place to for my family for birthdays, anniversary or any other special occasion. The last three times we have gone we have observed a dramatic decrees in service and quality of food. Our last visit was a month ago and it was horrible to say the least. The girls greeting us at the door were cold, unfriendly and very non welcoming. Our table sucked as it was against a pillar. Our waiter was rude, unfriendly and appeared to be unhappy working there. The food was par for a plate lunch place at best. This explains the bad service. Don't think we will be back soon.
on May 2,2014 | 12:44PM
jess wrote:
So I thought it was customary to tip out to the back of the house... anybody else with server experience to clarify this? I've been out of that field for a long time (thank God!) but we always had to tip out.
on May 2,2014 | 01:01PM
Poipounder808 wrote:
Just ate there last night and had a great dinner. It appears there is quite a turnover in the wait staff, didn't see the regulars. I will continue to go there.
on May 2,2014 | 01:18PM
IAmSane wrote:
Nice try, Roy.
on May 2,2014 | 05:19PM
HAJAA1 wrote:
C'mon Roy. So transparent.
on May 3,2014 | 02:04AM
pauliboy wrote:
everyone works hard at roy's. sharing tips with over minimum wage, non-tipped employees is a gesture of aloha...something that roy's teaches employees: take care of each other in the ohana. it's sad roy and his company get penalized for this. probably from one former server with an axe to grind.
on May 2,2014 | 02:21PM
st1d wrote:
the problems are that tipped personnel are earning far less than kitchen employees who are on an hourly salary. being forced to share tips with kitchen staff means that tipped employees must bear the burden of federal taxes on estimated tips via the restaurant's gross while splitting the tips with kitchen staff who most likely do not report the extra income on their taxes.

it is stealing, not sharing, and roy is not robin hood, he is stealing from the poor to give to his richer kitchen staff.

on May 2,2014 | 03:13PM
pauliboy wrote:
tipping out to the kitchen is voluntary as the article states and it's only a few dollars to say thanks, not a huge percentage of the actual take home amount. only servers tip out and they make way more than kitchen staff in way less time. it would be stealing if it was mandatory, but it's not and when you see how much "heat" the kitchen puts up with, this issue is really manini and blown out of proportion. for every $100 dollars a waiter makes, they tip out about $5.00 to kitchen...big deal, they deserved it. if it wasn't for them, the server won't make as much.
on May 2,2014 | 03:42PM
st1d wrote:
"The Wage and Hour Division of the U.S. Department of Labor found that the employer . . . unlawfully required servers to pay a portion of their shift tips to non-tipped hourly kitchen staff . . . "

"unlawfully required" means that it was mandatory and forced upon wait staff by roy in an effort to get the servers to subsidize roy's reluctance to compensate kitchen staff adequately.

'unlawfully required" or mandatory or coerced or stealing. simple, clear, and unlawful.

on May 2,2014 | 03:58PM
pauliboy wrote:
it was never mandatory or required. it was done by most, because it made sense. he's being made a scapegoat. this is a common practice is really busy restaurants by grateful servers.
on May 2,2014 | 06:09PM
st1d wrote:
nice try at spinning roy, or michael.

however, the u.s. dept. of labor found illegal activity at the heart of this scam.

smart of you to pull out and agree to the settlement before this investigation encompassed an even wider time period, thus, avoiding possible criminal charges as well as civil fines.

on May 2,2014 | 06:30PM
pauliboy wrote:
std, if you're that much against roy's and what goes on between his staff, then whatever, sorry you're troubled by this. he's still a great boss and a very generous man. there are some unbelievable commentary from some ignorant people. it's crazy how some draw there conclusions and rant about things they don't know.
on May 2,2014 | 07:45PM
HanabataDays wrote:
Where's Chef Ramsey? What a disaster.
on May 2,2014 | 02:57PM
IAmSane wrote:
on May 2,2014 | 05:21PM
bully106 wrote:
a tip is money you leave the SERVER based on the quality of service received from the SERVER. how did tip money turn into a pay off for the server, the company, and every body else working?
on May 2,2014 | 03:42PM
lokela wrote:
They should be paid more then minimum wage. I think Roy's is making some bucks with all his restaurants around.
on May 2,2014 | 03:43PM
false wrote:
yep they win... Their is NO way they will get that money back by raising prices. Who won again?
on May 2,2014 | 04:11PM
MariaBetty wrote:
Hawaii is so small to be known as a scrooge that I even tip for bad service. a service charge added to the bill mo bettah
on May 2,2014 | 04:14PM
false wrote:
Please don't go to Roy's HK anymore... Leave Roy's to us, stay away. Thank you
on May 2,2014 | 04:16PM
false wrote:
Last time I checked, everyone I know still works there or now runs a Roy's here or on the mainland...
on May 2,2014 | 04:25PM
handsomeguy wrote:
The Roy's in Ko Olina is really bad. Service stinks and the food is not good. Went to the one in Waikiki once and couldn't even eat the steak. Sorry Roy's.
on May 2,2014 | 05:07PM
SueH wrote:
Ahhh, such a wonderful, warm, and glowing company that never does anything wrong according to Lam......Then why did the DOL have to get involved in order for the employees to prevail? Something is rotten in Denmark, or is it just the lawyer???
on May 2,2014 | 05:25PM
dufus wrote:
Roy your greediness will not go unnoticed, you will reap what you sow...
on May 2,2014 | 08:13PM
th2855 wrote:
For all of you negative people making comments about food, service, dinning experience, save it for yelp. This story is about labor law. I have never worked for Roy but have known him for over 20 years. He is a man of high integrity and extremely employee oriented. He would never do anything intentionally wrong or illegall to his employees. As I perceive the incident it was a misinterpretation of the law. I've donated my time and worked side by side with him at many charity events. He has done more for the community than people realize. Unless you know him, NO TALK STINK.
on May 2,2014 | 08:43PM
HOSSANA wrote:
Yeah, right!!!
on May 2,2014 | 09:22PM
HOSSANA wrote:
Roy is no different than those corrupt employers that take advantage of their employees who work hard and long hours and is underpaid and I am really disturbed that he and his administrative staff "screwed" their employees and I do wish people would boycott his restaurant. Roy puts on a great face representing Hawaii's rest. industry but he is no better and is worse than those corrupt bosses that gouged their workers for every cent they earned.
on May 2,2014 | 09:20PM
KaneoheSJ wrote:
Roy, if you encourage "teamwork" then you should pay them "team pay". It is simply wrong to force or coerce workers or even to allow a culture of "sharing the tips with the kitchen workers" to enforce "teamwork". Waiters receive less pay than the kitchen staff who are probably paid better than minimum wage. Personally, I think we should do away with "tips" and that forced tip that is put on the tab. Instead, waiters should be paid at least minimum wage that is reflective of their work. The cost of the meal should be on the receipt outright and if that means raising the price of the food so that waiters can be paid a fair hourly wage, then that should be done. This "tipping" business is just a sham for businesses to pay their lower workers on the totem pole less. It is just an excuse. If people give the server a little extra, it is between them and the server and not between them and the owner of the restaurant.
on May 3,2014 | 12:24AM
HAJAA1 wrote:
Tips should go straight in the pocket of the server working with you. Busboys, hosts, and everyone else should be paid a regular wage w no tips. And tips are EARNED. I walk wherever they automatically add gratuity for anything.
on May 3,2014 | 02:07AM
hikine wrote:
Why didn't Roy's just pay it's employees the proper wages instead of having the tipped employee offset the non-tipped employees' wages? Would I voluntarily sacrifice part of my wages though I myself is already struggling to get by? It doesn't make sense. Roy's accountant thinks he/she might have outsmarted it's employees and the Labor Board.
on May 3,2014 | 02:12AM
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