Louisville, Kentucky-based specialty coffee chain Heine Brothers Coffee has paid $300,000 in back wages and damages to baristas following a U.S. Department of Labor (DOL) investigation.
Acting on a tip from the National Conference of Fireman and Oilers — the union agency representing a group of unionized employees at Heine Brothers — the DOL found that Heine Brothers improperly diverted workers’ tips to managers.
The company was found to be in violation of the Fair Labor Standards Act, which was revised in 2020 to guarantee that all tips are given to hourly workers, as opposed to managers, supervisors or employers.
According to the DOL, the coffee company has repaid $150,000 in back wages, plus another $150,000 in liquidated damages, to 492 workers.
“The Wage and Hour Division is committed to protecting the rights of workers and ensuring that they receive all the hard-earned wages they rely on to make ends meet,” DOL Wage and Hour Division District Office Director Karen Garnett-Civils said in a statement from the agency.
Heine Brothers currently has 18 stores in the Louisville area. Last September, baristas from 17 Heine Brothers locations voted in favor of unionization. A union contract has not yet been ratified.
In a statement shared with Louisville-based ABC affiliate WHAS, the company said that managers working the coffee bars had been part of tip sharing since the company’s inception.
“In July 2022, the Department of Labor notified Heine Bros that wage and hour laws were changed in 2020 and that a store manager with hiring and firing authority could no longer receive tips,” the company said. “Heine Bros followed the direction of the Department of Labor and has paid the agreed upon amounts under the classifications designated by the DOL for each payment for the covered periods. These amounts were paid by Heine Bros and store managers were not required to return the tips that they earned for the espresso bar shifts that they worked.”
This marks the second major investigation concluded by the DOL Wage and Hour Division that has touched the coffee industry in the past two months. In November, the agency announced that coffee and donut chain Krispy Kreme was ordered to pay $1.8 million in back wages due to overtime violations.
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Nick Brown is the editor of Daily Coffee News by Roast Magazine.