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How Hard Eight BBQ Landed in $867K of Tax Trouble with the Department of Labor

An audit reveals tips were improperly dispensed

It started with an audit, and it ended with a statement from the U.S. Department of Labor (DOL) saying that Hard Eight BBQ, a local chain with five locations around Dallas and Fort Worth, performed illegal pay practices, according to a report from the Dallas Morning News.

The report found that the barbecue chain shorted 910 workers out of $867,572 in tips and overtime pay. The problem? Tipped employees were shorted by the restaurant, which included managers, who are hourly workers, in the shared tip pool, according to DOL. Juan Rodriguez of the DOL told the Dallas Morning News that the illegal tip share happened at all locations from June 2019 to April 2021. The audit was conducted in August 2021, CBS DFW reports. The business violated the Fair Labor Standards Act, which bars employers or supervisors from taking tips from workers for any reason.

Hard Eight posted in an Instagram comment that it paid back the nearly $900K owed to employees immediately, saying in a statement that the issue was resolved back in August 2021. While the DOL has recovered all the funds from Hard Eight and the restaurant is currently in compliance per WFAA, Rodriguez told the DMN that only 219 workers had been found and compensated.

In that same Instagram comment, Hard Eight pushed back on the idea that managers weren’t paid overtime properly, calling recently published articles about it “misleading.”

“We paid all overtime, there was no issue there, our issue with the labor board was that we did tip share with all employees who worked on the floor at the restaurants,” Hard Eight commented in an Instagram post. “The law was changed and managers were not supposed to get tips! so, we backtracked and paid the employees the tip money that managers were receiving! The $900k has been paid back to employees who are not managers!”

Matt Perry, the chief operating officer of Hard Eight BBQ, told NBCDFW that the restaurant ownership misunderstood the law. He said that the decision to add managers to the tip pool was credited to them doing the same work as everyone else on the floor during a shift. But that’s where the labor law violations began and tripped alarms in the audit process, according to NBCDFW.

Dallas

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