The U.S. Department of Labor has recovered more than $85,000 in back wages for dozens of workers at a Buda coffee shop following an investigation into federal labor law violations.
According to the department, employees at Nate’s Coffee & Cocktails were denied proper wages due to an illegal tip pooling practice.
The Labor Department’s Wage and Hour Division determined the business violated the Fair Labor Standards Act by allowing a general manager to participate in an employee tip pool.
Under federal law, managers and supervisors are not allowed to share in employee tips. Because of that violation, the business was no longer eligible to use what’s known as a “tip credit”—a system that allows employers to pay tipped workers a lower base wage as long as tips make up the difference.
As a result, the company was required to pay full minimum wage to affected workers.
Federal officials say a total of $85,197 in back wages was recovered for 36 employees.
Labor officials emphasized that tips belong to workers, not management, and violations like this can lead to significant financial penalties for businesses.
Cases like this are part of ongoing enforcement efforts by the Department of Labor, particularly in the service industry, where tip-related violations are relatively common.
Officials say the goal is not just enforcement, but also education—encouraging employers to better understand wage laws and avoid costly mistakes.
