Chickie's & Pete's, Philadelphia's sports claim to fame, has agreed to a proposed multi-million dollar settlement with the Department of Labor.
The sports bar and restaurant chain has signed a judgment agreeing to pay more than $6.8 million in back pay and damages for improperly taking tips from servers and violating federal minimum wage, overtime and record-keeping requirements, according to the United States Department of Labor.
"The egregious actions by Chickie's & Pete's harmed real people and violated the promise that a fair day's work deserves a fair day's pay," said U.S. Secretary of Labor Thomas E. Perez.
The settlement proposal comes after the labor department was tipped off in 2012 to the wrong-doings and investigators from the Wage and Hour Division's Philadelphia and Southern New Jersey offices conducted investigations at nine of the company's restaurants.
The investigation showed that the company required servers to give a portion of their tips to an improper "tip pool" and that owner Peter Chiarrocchi Jr. kept about 60-percent of that pool for himself.
The amount was known in the sports chain as "Pete's Tax" and was paid by the manager in cash at the end of each shift, according to the Department of Labor.
The investigation also uncovered that servers and bartenders were paid a flat shift pay of $15, well below the required federal minimum wage.
In addition to the $6,842,412 settlement to be doled out between 1,159 employees, Chiarrocchi and the company will also pay a $50,000 civil penalty. Chiarrocchi will be required to write an article for a restaurant trade publication that addresses an employer's obligations under the Fair Labor Standards Act, according to the DOL.
