Houlihan’s Sued For Illegal Tip Pool
The U.S. Department of Labor recently filed a lawsuit against several Houlihan’s Restaurants franchises. The complaint alleges that the company violated the minimum wage, overtime, and record-keeping requirements of the Fair Labor Standards Act. The lawsuit was filed on behalf of about 1,430 current and former Houlihan’s employees and seeks back wages, tips, and liquidated damages. The complaint alleges that the Defendants required the employees to pay tips into a tip pool, which was then used to pay employees for tasks completing custodial and kitchen work, and that Houlihan’s regularly kept part of the employees’ tips, creating an illegal tip pool. The complaint also alleges that employees would work off of the clock and that the employees were not compensated overtime when they split their work at more than one Houlihan’s location. Tip pools may only include those employees who customarily and regularly receive tips, and employers may not share in the tip pool themselves. See Perez v. A.C.E. Restaurant Group Inc., No. 1:15-cv-07149 (D.N.J. 2015).
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