South Carolina restaurant, 167 Raw, pays employees over $600K in back wages after illegal tip pool
167 Raw told Fox News Digital it fully complied with the US Department of Labor and has since changed its tipping procedure
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A restaurant in Charleston, South Carolina, has paid $624,017 in back wages to 92 employees after a U.S. Department of Labor investigation discovered that the restaurant had been using an illegal tip pool.
The restaurant, 167 Raw, required its employees to participate in a tip pool that included management and other typically non-tipped employees, according to a press release from the U.S. Department of Labor’s Wage and Hour Division.
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The restaurant’s tip pool meant that its tipped workers weren’t being paid the difference between their direct wages and the federal minimum wage, the release said.
The tipped workers also ended up being paid less than the federal requirement when they worked overtime, according to the release.
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In a statement provided to Fox News Digital, 167 Raw King Street LLC, the company that owns 167 Raw, said that before the restaurant set up its tip pool last year, it had sought legal advice that determined the system was "legal and appropriate."
"Months later, however, the Department of Labor concluded that these procedures were in direct violation of certain federal guidelines," the company said in the statement. "The department began a full investigation and determined that while we had not intentionally violated any regulation, we had instead relied upon incorrect legal advice. "
167 Raw, a restaurant in Charleston, South Carolina, paid 92 employees $624,017 in back wages related to an illegal tip pool. (iStock / iStock)
The company added that it cooperated with the Department of Labor and paid its employees the back pay required. In addition, 167 Raw King Street LLC stated that the owners of the restaurant "never shared in or participated in the former tip pool."
Since paying its employees’ back wages, the company has also corrected its tipping procedure, 167 Raw King Street LLC said.
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"We continue to prioritize our team members and choosing to enter this voluntary agreement with the Department last year ensured that our valued team members continue to be well compensated within the framework of evolving federal guidelines," the company said.
In a statement, Jamie Benefiel, the Wage and Hour Division district director in Columbia, South Carolina, said that 167 Raw’s violations "are common in the restaurant industry."