Workers to split $600,000 after 'tip pool' ruled illegal

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Posted at 1:29 PM, May 15, 2022
and last updated 2022-05-15 14:29:23-04

CHARLESTON, S.C. (AP) — A restaurant in South Carolina has been ordered to pay more than $600,000 to nearly 100 workers who were forced to share their tips, the U.S. Department of Labor has ruled.

The tip pool at 167 Raw in Charleston was an illegal arrangement that violated the minimum wage laws, the federal agency said in documents obtained by The Post and Courier of Charleston.

The restaurant owners claimed a credit that let them pay tipped workers $2.13 an hour with the understanding the pooled tops would bring everyone’s pay up to at least the federal minimum wage of $7.25 an hour.

But taking the tips from waiters made the tip credit invalid and the restaurant was required to pay the higher rate, the Labor Department ruled.

The agency said 92 workers will share in a total of $624,017.

The restaurant owner said lawyers said the tip pool was legal before it started. But the Labor Department “determined that while we had not intentionally violated any regulation, we had instead relied upon incorrect legal advice,” 167 Raw owner Jesse Sandole said in a statement to the newspaper.

The restaurant cooperated with the investigation and is now complying with federal law.