The owner and managers of a Subway restaurant in Kent, and one in Des Moines, illegally pocketed tips of employees, according to the U.S. Department of Labor.
Additionally, the employer manually adjusted employee timesheets to reduce hours worked to 40 hours or fewer per week and failed to combine hours worked at multiple locations to evade its legal obligation to pay overtime rates, according to an U.S. Department of Labor March 5 news release.
Jani Enterprises Inc. operates one Subway restaurant in Kent, 25625 104th Ave. SE, and one in Des Moines, 21425 Pacific Highway S.
Three other owners of eight Subway restaurants in Lake Stevens, Marysville, Arlington, Monroe and Sultan violated similar labor policies.
“These Subway owners and managers willfully violated the Fair Labor Standards Act by underpaying employees and pocketing tips that did not belong to them,” said Thomas Silva, Wage and Hour Division District director in Seattle. “We encourage employers to review their practices and avoid the costly consequences of illegal actions.”
U.S. Department of Labor recovered $196,000 after investigators found owners and managers illegally pocketed tips. The franchisees were assessed $22,017 in penalties for the willful violations.
An investigation by the U.S. Department of Labor’s Wage and Hour Division found 10 Subway restaurants under common ownership allowed owners and managers to participate in employees’ tip pools, a violation of the Fair Labor Standards Act, according to the news release.
Division investigators determined the illegal practice deprived 100 employees at the locations of the tips left by customers though credit card payments.
U.S. Department of Labor recovered back wages of $80,528 in tips and $17,546 in overtime wages for 100 employees and the franchisees had to pay $98,074 in liquidated damages to the employees for breaches of contracts.
Workers can use the division’s Workers Owed Wages search tool at dol.gov/agencies/whd/wow to see if they are owed back wages collected by the division. Employers and workers can contact the Wage and Hour Division for help and assistance at its toll-free number, 1-866-4-US-WAGE.
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