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Restaurant Owners Slammed With $40,000 Tab After Withholding Money From Servers The Florida restaurant was found to have made several payroll violations.

By Emily Rella

entrepreneur daily
Fmfotograf | Getty Images

Talk about being tipped off over tips!

A Florida restaurant is under fire after an investigation by the Department of Labor (DOL) found that employers at a popular Mexican joint had engaged in a variety of illegal payment behaviors, prompting the restaurant to have to fork over nearly $40,000 in back pay.

The DOL found that El Guerrero Mexican Grill in Pinellas Park, Fla., made several payroll violations, including paying lower than minimum wage and withholding overtime pay.

The restaurant was also found to have taken employees' tip money, causing it to lose its "tip credit," which then bled into minimum wage violations, according to the DOL.

Related: The Staff You Need to Hire to Run a Restaurant

"When employers take a tip credit toward the payment of wages for their employees, they must adhere to all requirements of the law. Failing to do so can result in a costly lesson," said the DOL's Nicolas Ratmiroff, wage and hour division district director, in a statement. "Employers who fail to realize this and continue to pay workers less that they have earned can quickly find themselves struggling to maintain the workforce needed to stay in business."

El Guerrero was forced to pay back $38,755, which will be divided between six workers who were affected by the malpractice.

The withholding of wages is something that's unfortunately become more commonplace as businesses in the food and beverage industry struggle to make back earnings lost amid the pandemic, and workers are already facing lower salaries and paycuts due to rising supply costs caused by inflation.

Last month, restaurant group 3Pointe Restaurant Group Holdings LLC (which operates Freddy's Frozen Custard & Steakburgers restaurants) was found to owe over $77,000 to 213 workers after it was found that the restaurant did not compensate employees for break times.

The DOL noted that food service employees are some of the lowest paid workers in the nation.

According to Ziprecruiter, the national average salary for a restaurant worker is around $24,592 per year, or, roughly, $12 per hour.

El Guerrero did not immediately respond to request for comment.

Emily Rella

Entrepreneur Staff

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

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