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October 14, 2022

(Gray News) — Federal investigators have ordered a restaurant in North Carolina to pay thousands of dollars back to its workers.

According to the U.S. Department of Labor, Mugen Inc., which operates as Jay’s Kitchen in the Goldsboro area, keeps a percentage of its employees’ tips, which is a minimum wage violation of the Fair Labor Standards Act.

“Tipped workers in the foodservice industry rely on hard-earned tips to make ends meet,” said District Director of the Wages and Hours Division Richard Blaylock.

Officials said a federal investigation found $157,287 in remuneration for 65 restaurant workers.

According to the Department of Labor, companies deny workers full wages by keeping a portion of the tips they earn. Therefore, the employer forfeits the right to claim the tip credit and owes the worker the difference between the cash wage paid and the federal minimum wage.

“Tips are the property of workers, and under no circumstances should employers keep any portion of their employees’ tips,” Blaylock said.

Investigators also said they found Mugen Inc. failing to keep accurate records of hours worked, providing dates of birth for employees under the age of 19 or keeping addresses for some employees, are all FLSA record violations.

“We are determined to ensure the well-being and safety of young workers is not compromised,” Blaylock said.

In 2021, officials say the Wages and Hours Division recovered more than $34.7 million for more than 29,000 workers in the foodservice industry.

“Employers who don’t respect their workers’ rights will likely struggle to retain and recruit the people they need because workers seek opportunities with employers who do,” Blaylock said.

Mugen Inc. also owns and operates other restaurants in North Carolina, including Jay’s Sushi & Burger Bar, Ninja Hibachi Express, Ninja Grill, Ninja Hibachi & Burger and Jay’s 108.

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