Investigation finds employers improperly calculated overtime, misused tips

MANCHESTER, NH – The U.S. Department of Labor has recovered $51,217 in restored tips and back wages and an equal amount in liquidated damages from the operator of three Cumberland County, Maine, restaurants that denied 25 workers their full overtime wages or kept portions of their earned tips illegally.

Investigators with the department’s Wage and Hour Division determined that El Grand Rodeo, operating as El Rodeo in South Portland, El Rodeo Brunswick LLC in Brunswick and Azul Tequila LLC in Gorham failed to combine the hours of employees working at more than one location when calculating overtime for hours over 40 in each workweek. They also found Azul Tequila diverted tip pool monies to a part owner and a manager improperly and failed to pay overtime to one non-exempt salaried employee. The employers’ actions violated the Fair Labor Standards Act.

“The overtime and tip-related violations found in these investigations are all-too-common in the food service industry,” said Wage and Hour District Director Steven McKinney in Manchester, New Hampshire. “Workers who rely on tips depend on them to supplement their hourly wages to make ends meet. Employers who deprive workers money they earn may face costly consequences when they violate the law.”

Federal law prohibits employers, managers and supervisors from keeping employees’ tips, including tips in tip pools. The law applies even if tipped workers are...

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