WAILUA — A popular Kauai steakhouse has resolved a matter of reduced wages of tipped employees.
Castle Resorts and Hotels Inc., which operates the Bull Shed restaurant in Wailua, has returned $55,674 in tips and $2,959 in minimum wages to 17 servers for violating the wage provisions of the Fair Labor Standards Act, according to a Department of Labor press release on Tuesday.
Wage and Hour investigators found the company reduced the cash wage of tipped employees below the minimum wage of $7.25 per hour, according to the DOL. The employer unlawfully required servers to pay a portion of their shift tips to non-tipped hourly kitchen staff who were already paid at least the full minimum wage.
“We appreciate this employer’s full cooperation in resolving this matter,” said Terence Trotter, the DOL wage and hour division’s district director in Hawaii. “Employers cannot take a credit against their minimum wage obligation to tipped staff when they required a portion of those tips to be shared with traditionally non-tipped staff such as kitchen employees.”
Robin Graf, vice president of Operations for Castle Resorts and Hotels, said the wage and tips policy issue was inherited from a previous owner and they were unaware of the problem until the DOL brought it to their attention a few months ago. It was resolved quickly and without protest, he added, with most of the time since then waiting for DOL’s reply on how to resolve the matter.
The Bull Shed Restaurant opened in 1973 as part of the Mokihana Resort. Castle Resorts & Hotels began managing the restaurant in 2012, and also manages nearby Mokihna and Kauai Kailani resorts.
“When the error was brought to our attention we cooperated fully with the Department of Labor to resolve the issue, and we are pleased that we could resolve this issue of our team members,” Graf said.
Most of the 17 people in question are still employed at the restaurant, he added.