🗞️ Boise Restaurant Chain Pays $413K for Tip Pool and Wage Violations
Two Boise restaurants paid $366,261 in back wages to 388 workers plus $47,282 in penalties after illegally including managers in tip pools, deducting uniform costs, and miscalculating overtime under federal labor law.
The U.S. Department of Labor's Wage and Hour Division reached a settlement with owner Nikolai Castoro and two Boise restaurants, Barbacoa Grill and Coa De Jima Restaurant, for multiple violations of the Fair Labor Standards Act (FLSA). The investigation found that between them, the restaurants violated federal wage law affecting 388 employees.
The primary violation involved illegally including managers and supervisors in a mandatory tip pool. Under FLSA regulations codified in 29 CFR § 531.54, managers and supervisors cannot participate in tip pools, and doing so invalidates the employer's tip credit—meaning the employer must pay full minimum wage rather than the reduced tipped minimum wage. This violation alone triggered cascading minimum wage and overtime payment failures.
Additional violations included deducting uniform costs from workers' pay in amounts that reduced their compensation below the federal minimum wage of $7.25 per hour. The restaurants also miscalculated overtime by only paying time-and-a-half after employees exceeded 80 hours in a pay period, rather than the legally required threshold of 40 hours per workweek.
The investigation also revealed that some managers were incorrectly classified as exempt from overtime requirements despite not meeting the duties test for such exemptions under FLSA Section 13(a)(1).
The settlement requires the restaurants and Castoro to pay $366,261 in back wages to affected workers. Additionally, the Division assessed a $47,282 civil money penalty for willful violations. The Division determined the violations were willful—meaning the employer showed reckless disregard for FLSA requirements—a serious classification that can result in enhanced penalties and extends the statute of limitations for claims from two to three years.
According to Wage and Hour Division District Director Katherine Walum, "Wage violations, including employers diverting workers' tips, are a major concern for restaurant industry workers. Federal law protects workers' rights to be paid their earned wages in full."
Key Points
- 388 workers affected across two upscale Boise restaurants operated by the same owner
- $366,261 in back wages recovered for minimum wage and overtime violations
- $47,282 civil penalty assessed for willful violations showing reckless disregard of federal law
- Invalid tip pool included managers and supervisors, which federal law expressly prohibits
- Uniform deductions illegally reduced workers' pay below minimum wage requirements
- Overtime miscalculation only paid premium rates after 80 hours per pay period instead of 40 hours per workweek
- Misclassification of some managers as exempt from overtime despite not meeting duty requirements
- Willful violations determination indicates employer knew or should have known conduct violated FLSA
Primary Source Author: U.S. Department of Labor, Wage and Hour Division
Primary Source: US Department of Labor Investigation Finds Boise Restaurant Owner Denied 388 Workers Minimum Wage, Overtime Payments
Primary Source Link: https://www.dol.gov/newsroom/releases/whd/whd20260108-1
