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Sports bar pays $6.8 million for breaking rules on tips

Under federal law, it’s legal to pay service employees such as waiters, waitresses and bartenders as little as $2.13 an hour, as long as they receive enough in tips to equal at least the federal minimum wage of $7.25 an hour.

The law also allows businesses to require employees to contribute to a “tip pool” in order to distribute tips more evenly among employees.

However, if there’s a tip pool in place, none of the money in the pool can go back to the company. Also, managers and supervisors are not allowed to share in the pool, even if they occasionally wait tables or tend bar and receive their own tips.

A Philadelphia sports bar chain called Chickie’s & Pete’s was recently ordered to pay $6.8 million after it was found to have violated these rules.

The business settled a claim brought by the U.S. Department of Labor, which said that the chain had skimmed money from its tip pools and had engaged in other violations of the wage-and-hour laws.

According to the government, the company required workers to contribute to the tip pool in cash at the end of each shift, even if they received all their tips via credit cards. This often required employees to go to an ATM or borrow money from co-workers in order to pay the company out of their own pockets.

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