Ten Subway restaurants in Washington state – including locations in Des Moines and Kent – have been found by the U.S. Department of Labor’s Wage and Hour Division to have violated the Fair Labor Standards Act (FLSA) by allowing owners and managers to participate in employee tip pools.
Jani Enterprises Inc. operated the Subway restaurants investigated.
Division investigators determined the illegal practice deprived 100 employees in Arlington, Des Moines, Kent, Lake Stevens, Marysville, Monroe and Sultan of the tips left by customers through credit card payments.
Additionally, the employer was found to have manipulated timesheets to reduce employees’ hours and avoid paying overtime.
“These Subway owners and managers willfully violated the Fair Labor Standards Act by underpaying employees and pocketing tips that did not belong to them,” said Wage and Hour Division District Director Thomas Silva in Seattle. “We encourage employers to review their practices and avoid the costly consequences of illegal actions.”
The department recovered a total of $196,165 for the affected employees, including $80,528 in back wages for tips, $17,546 in overtime back wages, and $98,074 in liquidated damages. The department also assessed $22,017 in civil money penalties for the willful nature of the violations.
The Wage and Hour Division encourages workers who believe they may not be receiving proper wages to contact their local office. Workers can also use the department’s online tool to find out if they are owed back wages collected by the division.
