A Dallas barbecue chain recently made headlines for a mistake many businesses fall prey to: misunderstanding complex employment laws.
According to NBC News, “The restaurant paid nearly $900,000 to employees after the U.S. Department of Labor says the staff did not receive their fair share of tips and overtime pay. The restaurant says the issue was related to a misunderstanding of the labor law.”
Investigators found the restaurant shared tips servers earned in a tip pool with managers who were paid an hourly wage. In addition, managers were not being paid the appropriate rate for overtime hours.
The Department of Labor told the restaurant owners they were in violation of changes to the Wages and the Fair Labor Standards Act that took effect in 2019. The updated regulation does not allow an employer or their managers or supervisors to keep tips the workers receive for any purposes, regardless of whether the employer claims a tip credit.
When the owners of the restaurant learned of this change in regulation, they promptly updated their policies in compliance with the law and paid $867,572 in tips and overtime pay to 910 workers at their five restaurants.
Maintaining compliance with employment laws can be a daunting task for business owners. It’s important to stay on top of changing laws and regulations to protect your business and ensure your employees are being treated fairly and paid correctly.
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