South Carolina Tip Pool Concerns Continue to Rise

Recently, U.S. Department of Labor Wage and Hour Division investigators found a South Carolina restaurant distributed earned tips with traditionally non-tipped employees, such as dishwashers and cooks and, by doing so, operated an invalid tip pool. The division learned that the employer used earned tips to cover most of the servers’ gross pay and failed to pay a cash wage of at least $2.13 per hour directly to tipped employees as required. These actions violated the Fair Labor Standards Act, as did the employer’s failure to keep accurate record of tips earned and hours worked by employees.

A hotel in Michigan was cited to pay $110,000 in back wages and liquidated damages for six employees of the property, including two who worked there for more than 40 hours per week for nearly 10 months without pay. The couple thought they were working in exchange for free lodging at the hotel, but the hotel still charged them for their stay on some nights they worked. The Fair Labor Standards Act has specific requirements for employers seeking to take a credit for providing lodging to their employees.

Two large South Carolina franchise groups that have operations in multiple states was assessed civil money penalties of $25,000 and $36, 012, respectively, to address violations found at eight locations in South Carolina for employing children, ages 14 and 15, to work outside of legally allowed hours. Businesses that employ 14- and 15-year-olds must balance workplace experience with educational opportunities and be aware of the limits on these young workers’ job duties and hours,” said Wage and Hour Division District Director Jamie Benefiel in Columbia, South Carolina. “Child labor regulations ensure young workers can gain valuable work experience without interfering with their education or endangering their safety.”

The three examples provided are not members of the SCRLA. Rely on the Association to be a valuable resource for understanding and complying with US Department of Labor (DOL) regulations.

Here's how:

• Educational resources: The SCRLA offers workshops, webinars, and online resources on various labor law topics, including wage and hour laws, overtime regulations, minimum wage requirements, employee classification (independent contractor vs. employee), family and medical leave, and anti-discrimination laws.

• Help Desks and Hotlines: The SCRLA has a Labor Law Compliance Help Desk sponsored by Jackson Lewis Law Firm, LLP that provides members with free consultations with employment law attorneys

• Compliance Updates: Stay informed about changes in DOL regulations and keep their members updated through newsletters, social media, or their websites. This helps members proactively avoid any compliance issues.

Your membership into the SC Restaurant and Lodging association, gains you access to valuable resources and support that can help you stay compliant with DOL regulations.