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Department of Labor recovers $300K in unpaid tips for Heine Brothers' baristas

The agency says nearly 500 workers received back pay after an investigation found the company was diverting tips to management.

LOUISVILLE, Ky. — Hundreds of Heine Brothers' baristas have received back pay after a federal investigation last summer found the Louisville-based company had violated a labor and wage law.

The U.S. Department of Labor (DOL) found that store managers were partaking in tip pooling when they should not have been, and worked the company to give baristas tips they were owed.

In a media brief, the DOL said it worked with the National Conference of Fireman and Oilers to recover $300,000 in back pay and "liquidated damages" to nearly 500 employees.

According to the Wage and Hour Division, liquidated damages are "intended to compensate workers for damages they may have incurred as the result of not having been paid timely for all the wages they legally earned."

How much money each employee received was dependent on several factors, but mainly how many hours they worked.

“The Wage and Hour Division is committed to protecting the rights of workers and ensuring that they receive all the hard-earned wages they rely on to make ends meet,” Louisville Wage and Hour Division District Office Director Karen Garnett-Civils said.

Heine Brothers' co-founder and president Mike Mays said last December that the amounts returned to employees were paid for by the company.

"Store manages were not required to return the tips that they earned for the espresso bar shifts that they worked," he said.

Heine Brothers' has 17 locations in Kentucky and Indiana. Last September, baristas voted to unionize. It was the largest group to vote on unionizing in Louisville in almost a decade, according to the workers' union.

Read the company's full statement sent in December:

Since our founding in 1994, Heine Bros store managers have worked both espresso bar shifts for which they received tips, and admin shifts (not on the espresso bar) where they did not receive tips. On the espresso bar shifts, they worked with their fellow barista teammates in a role where another barista would have been scheduled if the store manager was not working it. 

In July 2022, the Department of Labor notified Heine Bros that wage and hour laws were changed in 2020 and that a store manager with hiring and firing authority could no longer receive tips. Heine Brothers followed the direction of the Department of Labor and has paid the agreed upon amounts under the classifications designated by the DOL for each payment for the covered periods. These amounts were paid by Heine Brothers and store managers were not required to return the tips that they earned for the espresso bar shifts that they worked.

Our understanding is that this could affect other retailers that have tipped employees. However, we want to be clear that Heine Bros store managers never took tips that would have otherwise gone to the baristas with whom they were working the espresso bar shift. If the store manager was not working that espresso bar shift, another barista would have been part of the team working the shift. 

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