Servers and bartenders only received tips — not hourly pay — at Texas bar, feds say

A Texas bar owes $250,000 after failing to pay dozens of its workers an hourly wage, federal officials say.

Owners at Oak Texas Bar & Grill and Oak Texas Bar in McAllen made 36 of their servers and bartenders rely solely on tips and did not provide the federally-mandated minimum wage of at least $2.13 per hour, according to a news release from the U.S. Department of Labor.

The wait staff was also not given overtime pay, federal officials said, and cooks at the restaurants were paid straight time for all hours they worked.

The Department of Labor said the restaurant owners owes $250,599 in back wages and damages.

The Fair Labor Standards Act was instituted in 1938. Businesses in Texas are required to pay workers a minimum rate of $7.25 per hour, and tipped employees are owed at least a $2.13 hourly rate.

“By law, employers who claim a tip credit must make sure their employees earn at least the federal minimum wage, and that all hours – including hours worked at a different location – be counted when calculating overtime pay,” said Cindy Cantu, the director of the DOL’s Wage and Hour Division. “Low wage workers depend on every dollar they earn to make ends meet, and employers must pay them full wages or face the costly consequences of violations.”

Oak Texas Bar & Grill and Oak Texas Bar are in McAllen along the state’s border with Mexico. The business has previously announced plans to open two additional locations, according to its website.

This story was originally published December 8, 2022 at 1:10 PM with the headline "Servers and bartenders only received tips — not hourly pay — at Texas bar, feds say."