Restaurant ordered to pay more than $157,000 for keeping workers’ tips, officials say - Live 5 News WCSC

(Gray News) - Federal investigators have ordered a restaurant in North Carolina to pay thousands of dollars back to its workers.

According to the U.S. Department of Labor, Mugen Inc., operating as Jay’s Kitchen in the Goldsboro area, kept a percentage of its employees’ tips, which is a minimum wage violation of the Fair Labor Standards Act.

“Tipped workers in the food services industry rely on their hard-earned tips to make ends meet,” said Wage and Hour Division District Director Richard Blaylock.

Officials said a federal investigation recovered $157,287 in back wages for the restaurant’s 65 workers.

According to the Labor Department, the establishment denied its workers their full wages by keeping portions of their earned tips. Therefore, the employer lost its right to claim a tip credit and owed the workers the difference between their paid cash wage and the federal minimum wage.

“Tips are the property of the worker, and under no circumstances may employers keep any part of their employees’ tips,” Blaylock said.

Investigators also said they found Mugen Inc. failed to keep an accurate record of hours worked, provide the dates of birth for employees under the age of 19 or keep addresses for several employees, all FLSA recordkeeping violations.

“We are determined to ensure the well-being and safety of young workers is not compromised,” Blaylock said.

In 2021, officials said the Wage and Hour Division recovered more than $34.7 million for more than 29,000 workers in the food service industry.

“Employers who do not respect their workers’ rights will likely struggle to retain and recruit the people they need as workers look for opportunities with employers that do,” Blaylock said.

Mugen Inc. also owns and operates other restaurants in North Carolina, including Jay’s Sushi & Burger Bar, Ninja Hibachi Express, Ninja Grill, Ninja Hibachi & Burger and Jay’s 108.

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