Wigle Whiskey ordered to pay $39K for making workers share tips with managers

The owners of Wigle Whiskey were ordered by the U.S. Department of Labor to repay nearly $39,000 to 41 employees after an investigation showed that servers were required to share tips with managers and supervisors.

The Department of Labor’s Wage and Hour Division said Pittsburgh Distilling Co., which operates as Wigle Whiskey, violated the Fair Labor Standards Act by allowing managers to retain tips and by failing to pay the tipped employees the appropriate overtime pay rate.

A spokesperson with the Department of Labor said Wigle complied with the order after an investigation, repaying $38,951 to the workers.

Meredith Meyer Grelli, a co-founder and owner of Wigle, said that the situation arose from a good faith dispute with the Department of Labor over a new rule — one which, she said, had been nationally debated for two years before taking effect in December.

“The DOL agreed that we did not intentionally violate the new rule,” Grelli said.

The error, she continued, was that they included an hourly, non-exempt floor manager at the distillery in the tip pool. Grelli said that the employee worked 90% of his hours in direct service to customers during the pandemic.

“We erroneously thought that the nature of his work and his contributions to the tip pool entitled him to share in the tips,” she said. “We now understand that this is not in accordance with the DOL’s 2021 rule, and we have adapted our policies.”

Grelli said that no tips went to senior management or exempt employees who were not involved in direct service.

“We are sorry for any disappointment we’ve caused in our mistake,” she said.

Federal law prohibits any employer, manager or supervisor from keeping any portion of workers’ tips, according to a news release issued by the Department of Labor,

Wigle also based overtime pay for its tipped employees on a cash wage of $4 per hour, instead of the federal minimum wage of $7.25 as required by law.

The investigation also showed that the company underpaid managers for overtime hours.

“Food service workers rely on their hard-earned tips to make ends meet. Restaurant employers must understand that keeping workers’ tips or diverting a portion of these tips to managers or supervisors in a tip pool is illegal,” said John DuMont, the wage and hour division district director in Pittsburgh. “As restaurants struggle to fill the positions they need to keep their doors open, those who deny workers their rightful wages are likely to find it more difficult to retain and recruit workers than those employers who abide by the law.”

According to the Bureau of Labor Statistics, 740,000 food services industry workers quit their jobs in April, and there were more than 1.3 million job openings in the industry.

Wigle’s website says it currently operates the distillery, which includes a tasting room, bottle shop, cocktail bar and kitchen on Smallman Street in Pittsburgh’s Strip District, as well as a tasting room, bottle shop and cocktail bar at Ross Park Mall. Last spring, Wigle announced it was hiring to fill 99 positions as businesses were starting to emerge from the covid-19 pandemic.