The U.S. Department of Labor Wage and Hour Division determined that Durango restaurateur Alison Dance violated minimum-wage, overtime, record-keeping and child-labor laws at Cyprus Cafe.
The Labor Department investigation spanned the two years between August 2012 and August 2014.
The Durango Herald obtained a copy of the DOL investigator’s findings through sources with first-hand knowledge of the investigation.
According to the report, the agency – which is empowered only to enforce minimum-wage laws – found Dance liable for $27,194.82 in minimum-wage violations affecting 28 employees as a result of the restaurant’s tip-pooling arrangement. Servers were asked to offer a share of their tips with the kitchen staff. Dance has long admitted that she erred in making Cyprus servers – whom she paid a lesser minimum wage – share their tips with the kitchen staff. She blamed the error on ignorance of Wage Order 30, the law forbidding this.
The agency also found that Dance broke other labor laws after Cyprus employees filed complaints alleging she had engaged in wage theft.
Dance says that the DOL’s findings were inaccurate. She said she had never denied altering timecards, a practice she said was widespread in the restaurant industry. She said the only reason that the Labor Department had sided against her was because she couldn’t prove that every time she had edited timecards, she had done so with the employees’ permission.
“It wasn’t malicious,” she said. “It wasn’t fraud. The fact is, I didn’t keep every scrap of paper. I didn’t keep records the way the DOL wanted me to. Stop dragging me through the mud, because it’s done.”
In the initial complaints filed with the Labor Department, former Cyprus front-house manager Kristin Harmon, who worked at Cyprus for eight years, and former cook David McClelland said that Dance had, in effect, withheld thousands of dollars that should have gone to employees by refusing to pay overtime and deleting hours that employees worked. They said she routinely shaved hours from timecards.
The final report found both allegations to be “substantiated.” It determined Dance owed $2,496 to seven employees for overtime back wages.
In a section dealing with “inaccurate hours worked,” the report said a review of Cyprus records shows Dance edited workers’ hours. It said Dance explained the edits “were requested by the workers because they forgot to clock in or out and that many workers used her password to alter the hours-worked records.”
The agency doesn’t have authority to award back pay or damages to affected employees, but the finding opens the door to civil lawsuits against Dance.
Harmon, one of the two employees who complained to the Labor Department, said Wednesday that the findings were bittersweet. She said the report vindicated whistleblowers, and ensured that “a lot of people got paid. But the money was paid for the tipping-pool violations, which was probably an honest mistake. Whereas taking people’s hours was very intentional.”
Harmon said she received no money from tipping violations.
The final report also found that Dance violated child-labor laws on two occasions in which minors worked later in the evening than lawfully allowed.
The Labor Department investigation concluded Aug. 19. Since then, the Herald has twice sought copies of the findings. Labor officials denied both requests, saying the investigation was still open.
