Diner took tips from servers to pay busser wages, feds say. Now it owes $1.35 million

A Pennsylvania diner forced its servers to give up some of their tips, then the money was used to pay busser wages, authorities said. That was one of several labor violations found during a federal investigation of the restaurant.

Now Musluoglu Inc., which operates as Empire Diner, along with its owner and manager are liable for over $1.35 million in back wages and liquidated damages to 107 servers and kitchen workers, according to a Sept. 14 news release from the U.S. Department of Labor.

This Aug. 18 federal ruling came after a five-day court trial over a lawsuit filed in 2018. Prosecutors said Empire Diner, owner Ihsan Gunaydin and manager Engin Gunaydin ran an illegal tip pool.

The Labor Department’s Wage and Hour Division based in Philadelphia said the Lansdowne diner also violated other Fair Labor Standards Act laws, including minimum wage, overtime and record-keeping provisions.

Specifically, authorities said the company illegally:

• Forced servers to give up 10 to 15% of their tips to pay the bussers’ wages
• Told employees to lie about their illegal pay practices, thus interfering with a federal investigation
• Did not pay overtime rates to kitchen employees who worked more than 40 hours a week
• Did not pay servers the correct overtime wage when they worked over 40 hours a week.

The defense attorney representing Empire Diner and the Gunaydins did not immediately respond to a request for comment from McClatchy News on Sept. 14.

“Tipped workers in the food services industry rely on their hard-earned tips to make ends meet. By diverting a portion of these tips, restaurant employers violate federal labor laws and harm workers and their families,” Principal Deputy Wage and Hour Administrator Jessica Looman said in a statement. “This significant and successful litigation demonstrates the Department of Labor’s commitment to protect the nation’s essential workers.”

In addition to the $1.35 million in back wages and liquidated damages the company is held liable for, the employer received a $47,620 civil money penalty “due to the willful nature of the violations,” according to the news release.

Lansdowne is part of the Philadelphia metropolitan area.

This story was originally published September 14, 2022 at 1:32 PM with the headline "Diner took tips from servers to pay busser wages, feds say. Now it owes $1.35 million."