Owner of O’Fallon, Alton restaurants kept servers’ tips, didn’t pay full wages, feds say
This article was updated June 17, 2024, with a statement from the restaurant owner.
The owner of two IHOP franchises in O’Fallon and Alton allegedly violated federal wage regulations, including keeping servers’ tips and failing to pay overtime, a U.S. Department of Labor investigation found.
The labor department is now suing the owner, Khalid Ramadan, for approximately $367,890 in compensation and damages for 179 IHOP workers. It also sanctioned him with a civil money penalty of $199,577.
Acting Secretary of Labor Julie A. Su filed the lawsuit Tuesday in U.S. District Court for the Southern District of Illinois.
Court records include only the workers’ first initials and last names. The lawsuit leaves open the possibility that other employees the secretary hasn’t specifically named are also owed compensation.
Ramadan’s IHOP restaurants are located at 1028 W. Highway 50 in O’Fallon and 181 Homer Adams Parkway in Alton.
“I take these allegations very seriously,” Ramadan said in a statement released by his attorney, William R. Wurm of St. Louis. “It’s my understanding that the investigation is ongoing and therefore cannot comment further at this time beyond stating that we strongly disagree with the Department of Labors’ claims.”
The labor department’s investigation reviewed employment and pay practices from March 1, 2020, to February 28, 2022, according to the complaint.
The lawsuit alleges that the restaurant skirted federal law by:
- Telling servers to surrender their tips to a shared tip pool when, in fact, the owner was keeping the tips for the restaurant or sharing them with back-of-the-house employees not eligible to participate in a mandatory tip pool.
- Failing to pay workers the required minimum wage.
- Directing managers to delete entire shifts from time records when workers approached 40 hours in a workweek to avoid paying overtime.
- Paying some employees “straight time” for hours over 40 in a workweek, when overtime was required.
- Using the federal minimum tipped wage of $2.13 per hour instead of the higher Illinois minimum wage when computing servers’ overtime rate.
The U.S. Department of Labor’s Wage and Hour Division reported that it recovered over $29 million in back wages for food service industry workers in fiscal year 2023.
This story was originally published June 12, 2024 at 11:30 AM.
