In a decisive blow to labor rights, a federal court has demanded a hefty sum from a Portland restaurant chain for illicit tip pooling. Pizzicato, with 11 locations in the city, has been instructed to fork over $540K in a settlement for labor violations, including letting managers dip their hands into the tip jar.
An investigation led by the Wage and Hour Division of the U.S. Department of Labor unearthed the shady practices at Pizzicato, exposing that not only were managers unjustly sharing in the tips, but the establishment had also put a minor in harm's way by making them drive, a clear infraction of labor standards. The restaurants, owned by Mark and Tracy Frankel alongside company officer John-Felix Rippel, have been hit with a one-two punch: $270,101 in back wages, and an identical amount in liquidated damages for the affected 367 workers, plus nearly $30K in penalties.
The District Court for the District of Oregon has clinched the deal by enjoining the owners from further violations of the Fair Labor Standards Act (FLSA) according to the U.S. Department of Labor.
Marc Pilotin, Regional Solicitor of Labor in San Francisco, didn't mince words, stating, "The resolution of this case should remind restaurant employers that the law forbids managers and supervisors to participate in tip-pools and pocket a portion of employees’ tips." Meanwhile, Katherine Walum, the Wage and Hour Division's District Director in Portland, said: "Wage theft, including employers’ pocketing workers’ tips, is a major concern for restaurant industry workers, who are some of the most vulnerable, low-wage workers in our community."
The Labor Department's vigilance in this case underscores a commitment to protecting workers in the hospitality sector, where wage theft remains a pervasive issue. Pizzicato's payout is not just a reimbursement for its employees, but a signal to other employers that exploiting workers’ earnings is a recipe for stiff legal reprisal.
