Hot Taco, a popular eatery in Charlotte’s South End, is disputing claims by the U.S. Labor Department that it cheated 110 current and former servers out of pay.
In a lawsuit, Labor Department officials said a Hot Taco “tip pool” for servers was invalid because management shared some of the money with employees who did not “customarily receive tips.”
Under federal law, that practice invalidated the pool, “and all tipped employees at Hot Taco are entitled to the full minimum wage and to reimbursement for all tips contributed to the invalid tip pool,” according to the lawsuit filed in May in U.S. District Court in Charlotte.
The lawsuit does not say how much money overall the government wants Hot Taco to pay current and former workers.
In a recent legal filing answering the government’s complaint, Hot Taco’s Charlotte lawyers said the lawsuit should be dismissed because the restaurant complied with all regulations under the federal Fair Labor Standards Act.
“The U.S. Department of Labor itself states that ‘a tipped employee may voluntarily share tips with whichever co-workers the tipped employee chooses,’ ” according to the legal reply filed July 19 by one of the restaurant’s lawyers, Grainger Pierce.
While Hot Taco “is not obligated to reimburse its employees who voluntarily chose to share some of their tips with their co-workers,” the restaurant twice chose to do so months before federal officials sued, according to Pierce’s reply. The Labor Department “never rejected either offer,” according to the filing.
In reply to a request for comment by the Observer on Friday, Labor Department spokesman Michael D’Aquino said officials “cannot comment on this ongoing litigation.”
Grainger and a spokeswoman for Hot Taco owner Bottle Cap Group, a Charlotte-based restaurant group, did not immediately reply to requests for comment.