Cedar Rapids Restaurant Forced to Pay Back $30,000 in Tips

A Cedar Rapids cafe has been forced to pay back thousands of dollars in wages, plus damages, after the U.S. Department of Labor found that restaurant management pooled tips improperly for years, according to the Cedar Rapids Gazette.

The Department of Labor concluded that Lu's Deli located at 1010 3rd Street SE in Cedar Rapids, had been improperly distributing tips for at least two years, from September 2021 to September 2023, according to the Gazette. The investigation was launched in 2023 after a former employee found documents that showed restaurant owner Laurie Konecny was including herself in the tip pool.

The Gazette reports that it is illegal in the United States for employers, including managers and supervisors, to keep a portion of the tips for any purpose. Employees at Lu's Deli noticed big differences in how tips were handed out on their paychecks. They were told that tips were split equally based on hours worked.

Employees at the restaurant discovered paystubs for Konecny that showed tips received, even during pay periods when the owner was on vacation, according to the Gazette. Lu's Deli was ordered to pay $29,456, including $14,000 in back wages and $14,000 in damages to 19 employees. The deli also paid a fine to the Department of Labor.

The Gazette reports that all back wages and damages have been paid.