Big Texan Restaurant To Pay $800,000 Following U.S. Department Of Labor Investigation

Published: Jun. 23, 2014 at 7:11 PM CDT
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Amarillo, TX - According to a news release from the U.S. Department of Labor, the Big Texan Steak Ranch has agreed to pay $650,000 in minimum wage back wages and $150,000 in liquidated damages to 279 current and former wait staff following an investigation by the U.S. Department of Labor's Wage and Hour Division.

Violations of the Fair Labor Standards Act's minimum wage and record-keeping provisions were found, which stemmed from an illegal tip pooling arrangement by the restaurant.

"Through investigations such as this one, the Wage and Hour Division continues to combat widespread labor violations among restaurants to protect workers and to ensure a level playing field for law-abiding employers, said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. "The restaurant industry employs some of our country's lowest paid workers, who are vulnerable to exploitation. We will continue our effort in the restaurant industry to promote awareness and improve compliance, so workers and businesses can prosper together."

The Wage and Hour Division's Albuquerque District Office's investigation determined the Big Texan illegally retained a portion of restaurant worker's tips to pay for business costs, such as menus, glassware, trays and contest prizes.

Illegal deductions from workers' paychecks for uniforms were also made by the employer, who also withheld additional percentages of tips as a disciplinary tactic, which brought workers hourly wages below the required federal minimum wage.

Also, the company failed to maintain accurate time and payroll records.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week.

An employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages, provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour to comply with the FSLA.

If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference.

Employers are required to provide employees notice of the FSLA tip credit provisions, to maintain accurate time and payroll records and to comply with the hours, hazardous orders and other restrictions applying to workers under the age of 18.

Statement from The Big Texan:

The Big Texan was audited in February of 2011 by the Wage and Hour Division of the U.S. Dept of Labor.

In most areas, they found we were doing things properly, but objected to the way we were processing the tracking, reporting and handling tip sharing from servers to other tipped employees.

Because of this, the Dept of Labor assessed significant penalties and fines. We chose not to litigate this matter and decided to cooperate. 

We made the compliance changes they suggested and agreed to pay the fines.
The effected staff that was working at the time of the audit, will receive distributions of payments from the Dept of labor.

We want to make a couple of things very clear; first, the type of tip sharing we were doing and are still doing is perfectly legal. Second we did NOT short or underpay anyone. Our mistake was the way we administratively processed and recorded the tipped share amounts, every penny collected that went into the tip pool from the servers was distributed to the employees that participated in the tip pool.  The Big Texan was not penalized for intential wrongdoing, but because of technical issues relating to reporting, and handling tip sharing to tipped employees.

For 54 years, the 250 employees of the Big Texan have always been part of the Lee family, because of this we chose to pay the fines for these technical issues. We are committed to paying our employees both legally and competitively.            

We will continue to do what we do best- taking care of our guest with the genuine "Big Texan" experience, supporting our community, and providing a positive working environment for area employment.

The Big Texan has always had an open door policy to all its employees regarding any questions about about how they are paid. This will NOT change.

Bobby & Danny Lee