Despite Good Intentions, Restaurant Ordered to Pay Back Wages


SPRINGFIELD, Mo. — Some local restaurants are in hot water with the Department of Labor, after doing what they thought was the right thing.

The Fair Labor Standards Act was updated in 2011, but Cafe Cusco says it didn’t start enforcing the changes here, until recently. The cafe, says it first learned about the new rules this past summer, when the department did a sweep in Springfield.

KOLR10 spoke to the owner, who explains how the company’s $20,000 loss is the servers’ gain.

Some might say it’s a case of  too many hands in the tip jar. But not if you ask Katie Lappin, a server at Cafe Cusco, who says she’s always voluntarily tipped out the kitchen staff.

“They’re the backbone,” Lappin said. “If the food’s not good, it doesn’t matter, no one’s making money.”

Many servers told KOLR10 that “tip pooling,” as it’s officially called by the Department of Labor, is common practice.

“It’s pennies on the dollar to servers at the end of the night,” Lappin said.

One of the changes from 2011 says employees who make less than minimum wage, usually servers, can’t be required to share tips with employees who make minimum wage or more, which is typically the kitchen staff.

“It didn’t make a wage difference for me,” Lappin said. “But what I did know, was that, for a lot of these guys that few extra dollars was gas for the week.”

Another anonymous server, not affiliated with Cafe Cusco, says for him, tip pooling led to theft. When he confronted his boss, he was handed a $40 check.

He writes, “I’d like to say that was the moment I walked out of that job and never looked back, but sadly that wasn’t an option, because I, like so many servers lived below the poverty line and couldn’t afford to leave.”
In Cafe Cusco’s case, the owner says servers voluntarily tipped the kitchen, and management distributed the money. It recorded those tips paid to the kitchen, as mandated by the IRS. But the IRS didn’t come knocking on its door, the Department of Labor did.

The department said everything would’ve been legal, if tips had never passed through the owner Joe Gidman’s hands.

“They had told us that we could go and take that money back from our staff, you know, from the kitchen guys, and pay back our servers, but we weren’t going to do that,” Gidman said.

He says the department now has its hand in the jar, collecting nearly $20,000 worth of installments from him, to pay to the servers.

“If they’re going to take that money from my mother and I’s pocket, it’s not going to sit in the government, it’s going to go back to our staff,” Gidman said.

Lappin said, “If I could, I would turn around and give the money right back to Claire and Joe because I agreed.”

With the Department of Labor involved, she says it could now, be a case of one too many hands in the tip jar.

The owner said he would not accept any of the servers’ money awarded to them from the Department of Labor. He says he’s happy to do, what he thought he was doing all along, the right thing.

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