Baristas were forced to share tips with managers of Kentucky coffee chain, feds say

Baristas at a Kentucky coffee shop chain were forced to share their tip pool with managers, a violation of federal labor laws, authorities said.

Managers of Heine Brothers coffee shops would take tips when they worked the espresso bar as baristas, according to a statement from the chain.

The Louisville business had allowed managers who worked barista shifts to participate in the tip pool since it was founded in 1994, Heine Brothers co-founder and President Mike Mays said in the statement.

But starting April 30, 2021, the Fair Labor Standards Act made it so managers and supervisors are prohibited from sharing in tip pools.

Mays said Heine Bros was notified of the change in July, learning that “a store manager with hiring and firing authority could no longer receive tips.”

“Our understanding is that this could affect other retailers that have tipped employees,” he said. “However, we want to be clear that Heine Bros store managers never took tips that would have otherwise gone to the baristas with whom they were working the espresso bar shift. If the store manager was not working that espresso bar shift, another barista would have been part of the team working the shift.”

Authorities said the company also did not keep a record of its tips, and it mandated that tipped pennies were donated to charity — violations of the Fair Labor Standards Act.

Heine Brothers has since paid $150,000 in back wages for 492 of its employees and $150,000 in damages, according to a Jan. 25 news release from the U.S. Department of Labor Wage and Hour Division.

“The Wage and Hour Division is committed to protecting the rights of workers and ensuring that they receive all the hard-earned wages they rely on to make ends meet,” Wage and Hour Division District Office Director Karen Garnett-Civils said in the release. “In this case, our collaboration with the National Conference of (Firemen) and Oilers provided important help in our efforts to protect the rights of nearly 500 workers whose employer denied them their full wages.”

In his statement, Mays said the company paid the back wages and damages. Managers were not required to return their tips to the business.

The Heine Brothers Coffee Union, part of the National Conference of Firemen and Oilers, tweeted that its “organizing committee would have liked to see the company confront their mistakes without being forced by federal agencies to respect the law.”

“We’re proud of our @HBWorkersUnion for taking a stand and recovering their unpaid tips,” the NCFO local chapter tweeted. “Thank you (Wage and Hour Division) for ensuring this unlawful practice stopped!”

Heine Brothers has 18 coffee shops in Louisville and southern Indiana, according to its website. The company plans to add as many as 12 more shops in the next few years.

This story was originally published January 26, 2023 at 7:55 AM with the headline "Baristas were forced to share tips with managers of Kentucky coffee chain, feds say."