An investigation by government officials has found that the owners of an eatery in North Carolina have to pay up.
On Oct. 11, the U.S. Department of Labor’s Wage and Hour Division announced the results of an investigation of a Goldsboro-based restaurant’s wage practices. Investigators found that Mugen Inc. — operating as Jay’s Kitchen — kept workers from receiving the full wages they were owed. By keeping portions of their earned tips, owners were ordered to pay $157,287 in back wages for 65 workers who were affected by the illegal labor practices.
According to officials, Jay’s Kitchen kept a percentage of employee tips, which is a minimum wage violation under the Fair Labor Standards Act (FLSA). By keeping a portion of staff tips, Jay’s Kitchen lost the right to claim a tip credit, which means they were calculating tips they were taking from staff’s wages and pocketing the difference.
The Department of Labor said that Jay’s Kitchen thus owed their employees the difference between what they ended up paying them and the $7.25 federal minimum wage for the hours each employee worked — which ended up totaling $157,287.
In addition, officials said they also found Mugen Inc. failed to keep an accurate record of hours worked, provide the dates of birth for employees under the age of 19 and keep addresses for several employees — all record-keeping violations under the FLSA.
“Tipped workers in the food services industry rely on their hard-earned tips to make ends meet,” said Richard Blaylock, the Wage and Hour Division’s Raleigh, North Carolina district director in a press release. “Tips are the property of the worker and, under no circumstances, may employers keep any part of their employees’ tip.”
Blaylock also said that the investigation found that Mugen Inc. had three 15-year-old employees to work more than three hours on school days, more than 18 hours in a school week and past 7 p.m. while school was in session, all of which is violation of federal child labor laws. For these violations, the division assessed a $1,915 civil money penalty.
Mugen Inc. also owns and operates five other restaurants in addition to Jay’s Kitchen, including Jay’s Sushi & Burger Bar, Ninja Hibachi Express, Ninja Grill, Ninja Hibachi & Burger, and Jay’s 108, all located in North Carolina.
TODAY Food reached out to the management and owner of Jay's Kitchen/Mugen Inc. but hasn't heard back as of this writing.
In recent years, the Wage and Hour Division has seen an increase in child labor investigations and violations, in 2021 finding 2,819 minors were employed in violation of the law in various ways. Their employers were fined a total of nearly $3.4 million in civil money penalties.
One such example of this sort of violation can be found in the past of a popular fast-food chain. In 2020, Chipotle was hit with a $1.3 million fine after investigators found in excess of 13,000 child labor violations had occurred in Massachusetts restaurants, with underage employees discovered to have been working past midnight and in excess of 48 hours in one week.
