A federal court has mandated that eateries in Portland compensate their workers with a total of $540,000 due to the unlawful division of gratuities.

Employer: Pizzicato Inc.
Address: 121 South Bancroft St. Portland, OR 97239
Type of Action: Consent Judgment and Order
Defendants: Pizzicato Inc; Mark Frankel; Tracy Frankel; and John-Felix Rippel
Background: After an investigation by the U.S. Department of Labor’s Wage and Hour Division, it was found that 11 restaurants under the Portland-based chain Pizzicato were illegally allowing managers to participate in tip pools, resulting in a portion of employees’ tips being withheld. This is a violation of federal law, which prohibits restaurant employers from including managers in tip pools, even if they are paid hourly. The investigation also revealed that the employer had hired a 17-year-old minor to drive a motor vehicle, which is a violation of the Fair Labor Standards Act’s hazardous occupations for minors.
Resolution: The consent judgment permanently prohibits Pizzicato owners Mark and Tracy Frankel and company officer John-Felix Rippel from violating the FLSA and orders them to pay $270,101 in back wages and $270,101 in liquidated damages, totaling $540,202 for 367 employees. The court also ordered Pizzicato to pay $29,797 in penalties.
Court: U.S. District Court for the District of Oregon
Quotes: “This case serves as a reminder to restaurant employers that it is illegal for managers and supervisors to participate in tip pools and take a portion of employees’ tips,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “The U.S. Department of Labor is dedicated to ensuring that employees receive all the wages they have earned, including tips from customers.”
“Wage theft, including employers keeping workers’ tips, is a major issue for restaurant workers, who are often low-wage and vulnerable,” added Wage and Hour Division District Director Katherine Walum in Portland. The division’s Portland district office conducted the investigation. The San Francisco Regional Office of the Solicitor reached the consent judgment in court.
Learn more about the Wage and Hour Division, including a search tool for back wages collected by the division. For information on how to file a complaint if you believe you have been misclassified as an independent contractor, or for confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243).
Download the agency’s new Timesheet App for iOS and Android devices, available in Spanish as well, to ensure accurate tracking of hours and pay.
Docket Number: 3:34-cv-00202-SI  

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