The federal Department of Labor (DOL) is suing Mathias Wakrat and Jean-Christophe Febbrari, owners of Entre Nous French Bistro in Old Town Pasadena, for keeping hundreds of thousands of dollars in cash and credit card tips intended for their staff to cover the restaurant’s business expenses. DOL investigation also found Entre Nous misclassified some employees as independent contractors and failed to keep proper pay records.
The lawsuit seeks to collect – for 18 employees – $250,000 in back wages and the same amount in liquidated damages (a statutory doubling of unpaid wages).
Mark Pilotin, the DOL’s San Francisco Regional Solicitor of Labor, stated:
“Illegal practices by restaurant employers such as Entre Nous French Bistro in Pasadena hurt employees and also law-abiding employers who face unfair competition due to the stealing of tips by unscrupulous employers. Customers expect — and the law requires — that tips go to employees, not their employer. We seek to recover the wages owed, enjoin this company from future violations and protect the significant public interest at stake.”
In apparent response, Entre Nous’ online menu states: “A 20% fee will be added to your bill. This is not a gratuity or tip. We are a no tipping establishment. The fee is revenue that is not segmented or designated in any way; it is taxed per state law and is used to fund all of our operations.”
State and federal laws govern who owns tips, whether they can be split with anyone, and whether employers can take a credit against minimum wage for tips received (in California, they cannot under Labor Code 351, regardless of federal law permitting such credits). Tips received by employees belong to the employees who receive them and may be part of a shared tip pool with certain other staff. Employers and managers may never keep a portion of a tip for themselves.
Take-Aways:
If employees receive tips, the employer must comply with applicable law to their distribution. While a business must never keep a portion, it may pool tips for sharing by certain employees. Best practice is to spell out such pooling in clearly written policy.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
- New Year, New Leaf – Workplace Policy Handbook & Forms for 2024 (January 5, 2024)
- Friday, January 26, 2024, Friday, February 23, 2024 – Annual Seminar for Employers Covering Employment Legal Essentials and New Workplace Laws (December 29, 2023)
- A Memorable $3.6M Lesson: “Unforgettable” Roofing Co. Hit for Knee-Jerk Retaliation and Intimidation (March 17, 2023)
- Cautionary Tale Episode 64 – Dept. Of Labor Half-Million Assessment Against Four California Care Homes- Feds Target Caregiving Industries (March 3, 2023)
Helena Kobrin
January 12, 2024