CHICKIE’S AND PETE’S TO PAY $6.8 MILLION FOR VIOLATING WAGE AND HOUR LAWS

Chickie’s and Pete’s, a prominent sports bar with 9 locations throughout New Jersey and Philadelphia, has recently agreed to pay $6.8 million in back wages and damages for taking tips from bartenders and waiters and for violating federal minimum wage and overtime laws.  The U.S. Department of Labor conducted a year long investigation and found that Chickie’s and Pete’s illegally underpaid and took tips from 1,159 servers and improperly retained 60% of the monies from the staff members’ tip pool, which was known as “Pete’s Tax.”   Separately, Chickie’s and Pete’s also announced that it agreed to pay an additional $1.68 million to settle a wage and hour claim commenced by 90 current and former employees.  As part of the settlement, Chickie’s and Pete’s also agreed to train all employees regarding their rights under the wage law and operation of tip pools and agreed to compliance monitoring for 18 months. 

The Department of Labor has described this case as one of the largest cases ever brought against an employer for violating tip-credit laws.

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