Florida Restaurant Ordered to Pay Back Wages and Damages to Servers Denied Tips

Ginza Fort Myers Inc., doing business as Ginza Japanese Restaurant in Fort Myers, Florida, has been ordered to pay $262,322 in back wages and damages to 75 servers who were denied tips by the restaurant. The U.S. Department of Labor found that the employer had required servers to tip sushi chefs, owners, and managers based on the servers’ total sales, making their tip pool invalid. The department’s Wage and Hour Division investigators also found that the employer could not account for $22,000 in tips that were withheld and had no records to prove those tips were paid to servers or any other employee. Additionally, the employer failed to pay a regular rate and overtime to dual-occupation workers who completed separate job roles, which violated the Fair Labor Standards Act.

Under the Act, a tip pool allows employers to require employees to share or “pool” tips with other eligible employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel, bussers, and service bartenders. However, employers, managers, or supervisors may not receive tips from a tip pool. Tips are the property of the employees who earn them, and no employer has the right to keep any tips unless they are given directly to the manager who directly serves a customer.

The Wage and Hour Division District Director in Tampa, Nicolas Ratmiroff, stated that “this case shows that when an employer handles tip pools improperly, they may no longer apply a tip credit which can lead to an employer owing employees significant back wages and damages.” The Department of Labor recovered more than $27 million for 22,500 food-service workers in 2022 alone. Employers who violate the Fair Labor Standards Act face penalties and must pay back wages and damages to affected employees.