The US Department of Labor has filed a lawsuit against Mosluoglu Inc, the operator of the Empire Diner and Restaurant in Lansdowne, Pennsylvania, over violations of the federal minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA).
The legal action against the employer and its principals follows an investigation by the US Department of Labor's Wage and Hour Division (WHD).
Investigators found that the organisation's president, Ihsan Gunaydin, and restaurant manager, Engin Gunaydin, had seized 10% to 15% of servers' total tips per shift.
The department says servers were owed the full minimum wage of $7.25 per hour, rather than the $2.83 tipped wage that they received, and are therefore entitled to restoration of their illegally seized tips.
The tipped wage is a base level rate, below minimum wage, that US organisations may pay to employees who earn significant income in tips. These employees must earn at least the federal minimum wage when tips are included; if they do not, the employer is required to account for the difference.
The WHD also determined that some Mosluoglu Inc employees received regular time rates for overtime hours, and servers were given overtime at time-and-a-half of their cash wages ($2.83 per hour) rather than basing overtime rates on the full minimum wage of $7.25 per hour, as the law requires.
The Department of Labor's regional solicitor for Philadelphia, Oscar Hampton III, said: "The US Department of Labor seeks to restore wages to Empire Diner's underpaid employees, and to level the playing field for employers that comply with the law."
The lawsuit, filed in the US District Court for the Eastern District of Pennsylvania, seeks back wages and an equal amount in liquidated damages for 83 employees, and also asks the court to prohibit the restaurant from violating the law in the future.
James A Bell, of Bell and Bell Law, who represents Mosluoglu Inc and its principals, said: "My clients, through a combination of hourly wages and tips, paid all of their employees more than the minimum wage at all times."
