The U.S. Department of Labor has recovered more than $300,000 for workers in Dallas and Southlake following investigations into companies there.
Federal investigators said Wednesday they recovered nearly $200,000 in tip earnings for bartenders after the owner of two Dallas restaurants was found illegally sharing tips and violating labor laws.
The DOL said Peak Inn and Adair’s Saloon owner Joel Morales ran an illegal tip pool that shared tips earned by the restaurants’ 20 bartenders with cooks, who were also not being paid accurately.
“Like many workers, bartenders spend long days and nights on their feet in the hope that great customer service earns them good tips,” said Jesus A. Valdez, the Dallas district director for the DOL’s Wage and Hour Division. “The Peak Inn and Adair’s Saloon illegally withheld tips that are these bartenders’ property and shared them with non-tipped employees.”
Investigators said Morales was not paying cooks at least the federal minimum wage of $7.25 per hour and not paying them time-and-a-half for overtime hours.
Additionally, the DOL said an employee’s work hours were not combined when they worked as both a bartender and a cook or when they worked at both restaurants.
DOL spokesperson Juan Rodriguez told KERA neither restaurant kept up with records required by law, including payroll and time records, from 2021 to 2023 when the investigation was underway.
Morales told KERA in an email he was not aware of the changes the Department of Labor made in 2021 to tip regulations allowing employers to include non-tipped employees, like cooks and dishwashers, to participate in the tip pool so long as they’re paid the federal minimum wage and don’t take tip credit.
“We were audited for two years and had to pay tips to front of the house that were originally shared to the back of house,” Morales said. “It was a series of unfortunate events, nothing nefarious.”
Rodriguez said Morales won’t face fines or prosecution but was required to directly pay employees their owed wages and provide proof to the department.
In nearby Southlake, investigators also recovered $104,000 in wages for workers at J.P. Above and Beyond Landscaping after the DOL found the company misclassified nearly 40 workers as independent contractors.
The department said the company failed to pay employees time-and-a-half for overtime they worked in the past and didn’t keep “accurate records.”
“Misclassifying employees as independent contractors is a serious problem that deprives workers of their hard-earned wages, benefits and protections,” Valdez said in a news release.
KERA reached out to the company for a comment but has not heard back.
This comes a month after the Department of Labor recovered more than $1.5 million in unpaid overtime wages and damages from Dallas-based heating, ventilation and air conditioning company C&G HVAC LLC.
The company failed to provide overtime pay and employee benefits to 430 technicians by misclassifying them as independent contractors. Investigators said it was "one of the largest recoveries of its kind."
The department also recouped $68,000 in owed wages from Rio Bravo Restaurant Inc., operating as Los Balones Sports Bar & Restaurant in Dallas last October. Investigators said four cooks were denied overtime pay despite working more than 60 hours a week.
In 2023, the Department of Labor recovered a total of more than $8 million in back wages for more than 12,000 workers across Texas, according to the Dallas Morning News.
Penelope Rivera is KERA’s news intern. Got a tip? Email Penelope at privera@kera.org.
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