Coffee chain sued for FLSA violation

Three former employees from an Oregon location of a national coffee shop are suing the company, claiming they were paid below minimum wage. The class-action lawsuit claims the chain discouraged workers from reporting tips. Instead the chain added 50 cents an hour to pay stubs and W-2 forms. According to Courthouse News Service, the company called these "imputed tips."

The suit claims that the coffee chain "willfully filed fraudulent information." The named plaintiff accused the company of inventing the declared tip amount "out of thin air." On behalf of other coworkers, the plaintiff alleges the chain violated the Fair Labor Standards Act.

Neither Oregon nor federal law mandate that the business withhold taxes from unreported tips. Employees do not owe taxes on tips because their income is not high enough. The amount that the business deducts from paychecks puts some workers below the minimum wage threshold, according to the lawsuit.

The named plaintiff on the case seeks at least $5,000 in damages for wage and hour violations, according to The Oregonian, a local news source.

In order to maintain compliance with FLSA, supervisors must ensure all workers are paid the required minimum wage. In addition, workplaces need to maintain records of employee time using attendance software.


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