Roy's restaurants have agreed to return more than $225,000 in tips and back wages to more than 300 tipped servers - including those on Maui - for violations of federal wage standards, the U.S. Labor Department reported Friday.
In the two-year investigation beginning in August 2011, Wage and Hour Division officials found that Roy's reduced the cash wages of tipped employees below the $7.25 an hour minimum wage without allowing them to keep all of their tips, the Labor Department said.
Investigators found that Roy's unlawfully required servers to pay a portion of their shift tips to nontipped hourly kitchen staff, who were paid at least the minimum wage, the Labor Department said.
Terence Trotter, the division's district director in Hawaii, said that "employers cannot take a credit against their minimum wage obligations to tipped staff if they require a portion of those tips to be shared with traditionally nontipped staff, such as kitchen employees."
Roy's Holdings Inc. has agreed to return $136,761 in tips and pay $88,424 in back wages to 326 tipped servers for the violations of the Fair Labor Standards Act, the Labor Department said.
The violations cover Roy's six restaurants in Hawaii, including the one in Kaanapali, said Jose A. Carnevali, deputy regional director of public affairs with the Labor Department in San Francisco.
Trotter said that the investigation showed that the violations were "not willful."
"We appreciate Roy's Holding Inc. addressing the deficiencies in their employee tip distribution policies in a timely manner," he said. "The employer has provided the wage hour division's district office in Honolulu with a compliance action plan that affirmatively addresses the deficiencies found at their six locations throughout the Hawaiian Islands."
Roy's also was fined $1,550 for permitting a minor to load a trash compactor, which is considered a hazardous occupation for workers under 18, the Labor Department said. That violation occurred at Roy's Waikoloa Bar & Grill.