Owners, Managers at WA Subway Stores Kept $80K in Staff Tips: DOL

Estimated read time 2 min read
  • Owners and managers at 10 Subway stores in Washington state illegally took money from staff tip pools, the Labor Department says.
  • The stores also reduced staff’s hours on their timecards to avoid paying overtime, the DOL said.
  • The stores have now given $196,000 in tips, overtime wages, and liquidated damages to 100 affected workers.

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Owners and managers at 10 Subway stores in Washington state illegally kept $80,000 in staff tips, the Department of Labor says.

The stores, which were under common ownership, let owners and managers take part in the pools for tips left on credit-card payments, the DOL said in a press release on Tuesday. 100 workers lost out on tips because of this, the DOL said.

Under the Fair Labor Standards Act, business owners and managers are not allowed to participate in staff tip pools. Managers and supervisors can only keep tips that they receive directly for services provided solely by them.

The stores also manually adjusted employee timesheets to make it appear that they hadn’t worked more than 40 hours a week and didn’t combine hours for staff who worked shifts across multiple stores in the group, the DOL said. They did this to avoid paying time-and-a-half overtime rates, per the DOL.

Following the DOL’s investigation, the stores gave $80,528 in tips and $17,546 in overtime wages to the 100 affected workers, as well as the same amount in liquid damages, totaling just over $196,000.

The stores also paid $22,017 in civil money penalties for the willful nature of the violations.

Subway did not respond to a request for comment from Business Insider.