Nearly $500,000 in back wages will be paid by Earl’s Restaurants Ltd. to 234 employees after a Fair Labor Standards investigation, the U.S. Department of Labor announced today.
The investigation centered on three locations, two in Denver and one in Scottsdale, Ariz., according to the Labor Department.
The investigation found that the company required all tipped employees to share 3 percent of their tips with managers and cooks, contrary to federal law.
Additionally, tipped employees were required to contribute 75 cents a day from their tips to a “dine and dash fund” to cover unpaid checks if a customer left without paying, said federal investigators.
The employees will share $499,566 in back pay.
“The Department of Labor is committed to enforcing the law and ensuring that employees receive the wages to which they are legally entitled,” said Alex Salaiz, district director for the Wage and Hour Division’s Denver office. “In this case, we were able to recover nearly a half a million dollars for these workers.”
Earl’s is a Canadian-based restaurant chain with 50 locations in Canada and three in the United States. The investigation of the U.S. locations began in May 2006.
The company agreed to comply with the provisions of federal law and pay the back wages.
A breakdown of the back wages showed that 173 Colorado workers at the two locations will receive a total of $385,198 while 61 workers at the one Arizona location are due $114,368.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com
