Court documents reveal the owner violated federal wage laws by redistributing tips earned by servers and bartenders to kitchen staff.
EAST LANSING, Mich. — A popular taco restaurant in East Lansing, Michigan, has been fined over $820,000 for operating an illegal tipping pool.
According to a settlement filed in the U.S. District Court in Grand Rapids, Barrio’s owner, Jacob Hawley, redistributed tips from servers and bartenders to kitchen staff, violating federal wage laws.
The Department of Labor’s investigation revealed that Hawley failed to comply with wage and tip requirements, including not paying tipped employees the federal minimum wage of $7.25 per hour. As a result, the company must repay the misappropriated tips.
George Smyrnis, owner of Sophia’s House of Pancakes, commented on the issue, stating that his restaurant ensures fair tip distribution by running daily reports. He emphasized that servers at his establishment are not required to split their tips and are compensated based on their performance.
Barrio did not respond to requests for comment. The state’s Wage and Hour Division clarified that tips can only be shared among employees who receive them as part of their wage compensation.
WCNC Charlotte To Go is a daily news and weather podcast you can listen to so you can start your day with news that impacts you from the team at WCNC Charlotte.
SUBSCRIBE: Apple Podcasts || Spotify || Pandora || TuneIn || Google Podcasts || iHeart
All of WCNC Charlotte’s podcasts are free and available for both streaming and download. You can listen now on Android, iPhone, Amazon, and other internet-connected devices. Join us from North Carolina, South Carolina, or on the go anywhere.
