The United States Department of Labor has recovered $72,564 from an illegal tip pool managed by a small cafe chain in Louisville, Kentucky.
The federal department’s Wage and Hour Division (WHD) announced today that the operators of three cafe locations from parent company Wiltshire Pantry allowed two managers to take a portion of servers’ tips.
The agency said that constitutes a violation of the Fair Labor Standards Act, which was revised in 2020 to ensure that tips go to regular employees, as opposed to managers or owners.
“Under no circumstance may employers or supervisors participate in a tip pool,” Wage and Hour Division District Director Karen Garnett-Civils said in the announcement. “The Fair Labor Standards Act prohibits managers and supervisors from keeping any portion of an employee’s tips for any purpose.”
According to the agency, the $72,564 will be returned to 34 workers affected by the tip pool. The company behind the pool, Wiltshire Pantry, maintains catering and event services, while operating three cafes under the Wiltshire Bakery and Café name. A spokesperson for the company declined DCN’s request for comment on the DOL findings.
Louisville’s cafe industry has been notably prominent this year in the WHD’s enforcement of the revised Fair Labor Standards Act. In January of this year, the WHD announced it was recovering more than $300,000 in lost wages for workers at the Louisville-based chain Heine Brothers. Two weeks later, the agency announced it was recovering $188,000 in back wages from Louisville-based Sunergos Coffee and Please & Thank You, also for violations of the Fair Labor Standards Act.
At that time, Please & Thank You Owner Brooke Vaughn described the case to DCN as “nonsensical” and caused her to “lose faith” in government systems. Vaughn also characterized the case as a kind of cautionary tale to cafe operators in their application of the word “manager” in official titles.
“[The DOL] kind of just applied a template to all businesses, and it doesn’t really matter what your personal business structure is,” Vaughn told DCN in February. “I would say that the most important part is that other coffee shops need to know what the legal definition of manager is. They need to be concerned if they have somebody with a role as manager that isn’t actually doing managerial duties because the DOL doesn’t care.”
DCN’s request for comment from the DOL regarding the application of the law in Louisville was not immediately returned.
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