California restaurant receives thousands of dollars in tips from staff: federal lawsuit

• A California restaurant “misappropriated” thousands of dollars in tips for business expenses, the DOL alleges.
• The restaurant deposited the tips into a business account and gave a portion of them to staff each week, the DOL alleges.
• The DOL charged the company with violating the Fair Labor Standards Act. It is seeking $500,000 for staff.

A French restaurant in Pasadena, California, took thousands of dollars in tips from servers, runners and bartenders and “diverted” them to business expenses, the Department of Labor alleges in a lawsuit.

The DOL filed a lawsuit against 2Poto, the operator of Entrée Noux French Bistro, alleging that the company violated the Fair Labor Standards Act. It is seeking $500,000 for affected staff.

The lawsuit, filed Dec. 28 in the U.S. District Court for the Central District of California, alleges that owners Jean-Christophe February and Matthias Wakrat kept a portion of their employees’ tips to cover business expenses. It is said that The DOL alleges that the upscale restaurant had a minimum spend of $50 per meal, deposited both cash and card tips into its business account, and distributed only a portion of the money to its staff via weekly wire transfers. That’s what it means.

For example, during the week ending Dec. 21, 2021, customers left approximately $12,500 in credit card tips, but the restaurant passed on less than $7,600 of that amount to staff, the complaint alleges. .

Employers are prohibited from keeping tips for staff “under any circumstances”. FLSA It stipulates that If a restaurant operates an illegal tip pool, for example by sharing tips with the owner or manager, the charge to the tip credit may be invalidated, which could result in employees being paid less than minimum wage. There are violations, as the DOL stated in a previous tip investigation.

The DOL says in its lawsuit that Entre Nous implemented a no-tipping policy in May 2023 during its investigation and instead collected a 20% service fee. But some customers still leave cash tips, which the restaurant keeps, the DOL claims.

Entrée Nous states on its menu that the price is “not a gratuity or tip.” Fees vary from 20% to 18%.

“Fees are income that is not divided or designated in any way and is taxed in accordance with state law and used to fund all of our operations,” the report states.

The DOL also found in its investigation into Entrée Nous that the restaurant misclassified several employees as independent contractors and failed to record all tips employees received and all hours worked, among other charges. The lawsuit alleges that it was discovered that the company did not keep accurate payroll records.

The DOL alleges that these actions violate the FLSA. The lawsuit does not specify an amount, but the DOL said in a press release that it is seeking damages equal to $250,000 in unpaid wages for 18 employees.

Entre Nous is rated 4.6 stars on Google and 4.5 stars on Yelp. The restaurant’s appetizers start at $29.

Business Insider reached out to Entre Nous for comment, but the company did not immediately respond as it was outside normal business hours.