A local barbecue chain has paid nearly $900,000 to its employees after the US Department of Labor said staff did not receive their fair share of tips and overtime pay. The restaurant says the problem was related to a misunderstanding of labor laws.
DOL investigators said Hard Eight BBQ in Roanoke shared tips earned by servers with managers who were paid hourly wages and that these managers were not paid the correct rate and a half for hours worked over 40 hours per week. .
The Labor Department said Thursday Hard Eight paid $867,572 in tips and overtime to 910 workers at its five restaurants.
“Roanoke Hard Eight violated the law by including the managers in their tip pool. In doing so, the employer denied tip workers some of their tips and the managers paid the appropriate overtime,” the manager explained. Salary and hour district Jesus A. Valdez in Dallas. “As companies struggle to find people to do the work necessary to keep them operating, employers would be wise to avoid violations or risk finding it even more difficult to retain and recruit workers who can choose to look for jobs where they will receive all their legitimate wages.”
In an interview with NBC 5 on Friday afternoon, Hard Eight BBQ COO Matt Perry said they were contacted in 2020 about the investigation and an audit revealed shortly after red flags in their tip-sharing program that needed to be addressed.
Perry said managers are part of the tip pool at their five restaurants because they do the same work as other hourly employees on a given shift and because of that, they believe managers should also receive a small portion of the tip share.
The DOJ told Hard Eight that the Wages and the Fair Labor Standards Act which came into force in 2019 did not allow an employer or its managers or supervisors to keep tips that workers in the company receive for any purpose, whether or not the employer claimed a tip credit.
According to Perry, Hard Eight never withheld an employee’s pay, and the company misunderstood the law and simply tipped the wrong people.
Upon learning of the change in regulations, Perry said the restaurant made immediate changes, including adjusting the tip pool to include only hourly non-managerial employees, but also increasing the salary of managers to compensate for the loss of no longer be in the tip pool.
Perry said that since August 2021, Hard Eight BBQ has been in compliance with the law, which he said he checked again with the Department of Labor on Friday morning.
NBC 5’s Patrick Reynolds contributed to this report.