Dive Brief:
- A New Albany, Ohio, country club and golf course has paid nearly nearly $90,000 in back wages and damages to 32 workers, the U.S. Department of Labor announced Dec. 15.
- The company, New Era Golf Ohio NAL Inc., included salaried managers in tipped employees’ tip pool, thereby invalidating it and preempting the company’s ability to take a tip credit, DOL said.
- New Era also violated the Fair Labor Standards Act by not keeping accurate pay records and making automatic deductions for lunch breaks, even when employees were unable to take a break, DOL alleged. The deductions also led to employees not receiving minimum wage or overtime as required by law.
Dive Insight:
Businesses often run afoul of tipping regulations.
While pooling tips is an acceptable practice, DOL has specified through an FLSA rule that managers and supervisors may not collect on the earnings, even if they do not claim a tip credit. Violating the rule can come with hefty penalties; recently, an Austin-based restaurant agreed to pay $230,000 after DOL found it required tip-sharing with managers.
DOL’s Wage and Hour Division sought additional resources this year, saying it would prioritize heavy enforcement, particularly in lower-wage industries and in legal areas like overtime, minimum wage, child labor and tipping.
Violations like those are common in the food service industry, and WHD is determined to ensure employers pay workers their full wages and benefits,” Matthew Utley, wage and hour district director in Columbus, Ohio, said in the agency’s statement on the news.
To keep on top of wage and hour compliance, restaurant industry HR pros can review DOL’s Quick Service Restaurants Compliance Assistance Toolkit. A former WHD administrator HR Dive interviewed in May provided some guidance as well. He recommended employers: avoid automatic deductions; ensure supervisors are educated in compliant pay practices; and create alternative reporting avenues, among other tips.
