Michigan Taco Restaurant Proprietor Ordered to Pay $823K in Again Wages

A federal courtroom has ordered the proprietor of three West Michigan taco eating places to pay 177 employees a complete of $823,326 after the courtroom granted the U.S. Division of Labor’s request for abstract judgment, concluding that the eating places operated an illegal tip pool that led to violations of federal minimal wage and time beyond regulation rules.

On Nov. 5, 2024, the U.S. District Court for the Western District of Michigan entered summary judgment against Sparty Tacos LLC in East Lansing, TC Tacos LLC in Traverse City and GR Tacos LLC in Grand Rapids – all working as Barrio Tacos – and proprietor Jacob Hawley that required the employers to pay $411,663 in again wages and an equal quantity in liquidated damages.

The judgment resolves the department’s Sept. 7, 2023, complaint prompted by an investigation by its Wage and Hour Division that alleged Truthful Labor Requirements Act violations by the three eating places and Hawley.

Particularly, the courtroom discovered the employers:

• Required tipped workers – who had been paid by the employers utilizing the tip credit score – to give up a portion of their money and bank card tricks to managers after every shift. Managers then redistributed these tricks to non-tipped workers, together with kitchen employees.
• Did not pay tipped workers the federal minimal wage of $7.25 per hour.
• Incorrectly paid tipped workers time beyond regulation based mostly on the tip credit score price as an alternative of the relevant minimal wage price.
• Did not hold correct information of workers’ hourly charges of pay and time beyond regulation wages due.

The division beforehand assessed Hawley and his three eating places $23,904 in civil cash penalties for the violations related to this case. That matter is being litigated earlier than the division’s Workplace of Administrative Legislation Judges.

Supply: Division of Labor

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Michigan