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$118,000 recovered for Hawaii restaurant workers forced to share tips with managers

A federal investigation of a restaurant group in Hawaii has led to the recovery of nearly $118,000 for workers who were required to share tips with their managers.

The U.S. Department of Labor’s Wage and Hour Division found that D.K. Restaurant Group, which operates Sansei Seafood Restaurants and Sushi Bars in Kapalua, Kihei and Waikoloa and D.K. Steak House in Honolulu, had forced servers to share their tips with managers.

When the group reopened its restaurants after temporarily closing due to the COVID-19 pandemic, it had reduced managers’ salaries by at least 25%. It drew from the wages of tipped workers to make up for the salary reductions, which is a violation of the Fair Labor Standards Act.

“Customers tips to restaurant staff for good service are the private property of those workers in the tip pool, such as servers, bartenders and other front-line workers. Any attempt by management to misuse a portion of these tips violates tipped workers’ wage rights,” said Wage and Hour Division District Director Terence Trotter in a statement. “The U.S. Department of Labor is determined to protect workers’ right to keep all their earnings and prevent employers from gaining a competitive advantage by reducing their labor costs.”

The labor department recovered $117,710 in back wages and liquidated damages for 70 workers. It also assessed D.K. Restaurant Group nearly $8,600 in penalties for the violations.

In Fiscal Year 2021, the Wage and Hour Division recovered more than $31.7 million in back wages for workers in the food service industry.

The Bureau of Labor Statistics projected more than 1.3 million job openings in the accommodations and food service industry in April. It reported that total employment in food and beverage serving and related jobs is projected to grow 17% from 2020-2030, which is faster than the average for all occupations.

Employers and workers can call the division confidentially with questions regardless of immigration status. The agency’s Timesheet App for Android devices can help ensure that hours and pay are accurate. The department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-487-9243.

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