Large SC Restaurant Chain Pays $700,000 in Back Wages, Fines from DOL

A South Carolina restaurant chain has paid more than $718,000 in back wages and penalties after federal investigators found that the company had failed to pay overtime to workers and allowed managers to dip into the tip pool.

Tropical Grille paid $618,666 in back wages to 779 employees, plus a $100,000 fine for violations found at 13 restaurants across the northern part of the state, the U.S. Department of Labor announced this week. The restaurant, owned by Lazaro and Shadid Montoto, also violated child labor laws by allowing 14-year-olds to work late hours, the department said in a bulletin.

The chain allowed managers and supervisors to participate in the restaurants’ tip pools, something that is prohibited by the U.S. Fair Labor Standards Act. The company also failed to combine all hours worked for employees at some locations, which shorted some workers of overtime pay.

“As part of a compliance agreement, the employer is also required to update or create materials that address compliance with child labor laws and provide annual training on child labor regulations for managers and supervisors, among other requirements,” the department said in a statement.

The restaurant owners could not be immediately reached for comment Wednesday morning.

The DOL did not say what prompted the investigation, or if the payroll numbers may have affected the restaurant company’s workers’ compensation insurance premiums.