DALLAS — Bartenders at two Dallas restaurants -- The Peak Inn and Adair’s Saloon -- will recoup nearly $200,000 after the owner of the two businesses was cited for wage and overtime violations, the Department of Labor said.
The Department of Labor's wage and hour division found that Peak Inn and Adair’s Saloon operated an illegal tip pool, where employers shared the tips earned by 20 bartenders with the restaurant's cooks, according to a press release from the department. Joel Morales, the owner of both established, was cited for wage and recordkeeping violations, the Department of Labor said.
Both bars are owned by Morales and were named among Dallas' top 100 bars in 2024 by the Dallas Observer.
The Department of Labor said that investigators found Morales violated minimum wage and overtime laws by not paying his cooks at least the federal minimum wage ($7.25 per hour) and by not paying one-and-a-half times their regular rate pay for working overtime.
The department also accused Morales of not combining hours when employees worked as bartenders and cooks at both locations.
"The Peak Inn and Adair’s Saloon illegally withheld tips that are these bartenders’ property and shared them with non-tipped employees," a release from the Department of Labor read. "Our investigation led to a significant recovery of hard-earned wages for 20 workers."
Reached for comment, Morales denied that he was withholding payment to his employees and said the citation was the result of an update to Department of Labor regulations for restaurants that he was not aware had been changed. He also denied not paying his cooks minimum wage, and said the Department of Labor calculated the time-and-a-half pay demands by including the tip amounts that has been shared with them, and not their standard pay rates.
"We were audited for two years and had to pay tips to front of the house that were originally shared to the back of house," Morales said. "It was a series of unfortunate events, nothing nefarious."
In the wake of those audits, Morales said his bartenders were paid back the tips his cooks had been given, and that his employees' hourly pay rates were raised to be in accordance with regulations. Morales added that he worked hand-in-hand with the Department of Labor to calculate the amount money owed to his employees, and that he fully cooperated with the investigators -- to the point, he said, that a fine that was initially to be imposed on his businesses was later removed.
"The DoL determined that, although we broke the rules, we were not harboring money from employees," Morales said. "All the tip money was paid to employees, but not in the proper way."
