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ALBUQUERQUE, N.M. — The U.S. Department of Labor announced Thursday it had filed a lawsuit against St. James Tearoom Inc. and its owners, Mary Alice and Daniel Higbie, for alleged violations of the Fair Labor Standards Act.

The lawsuit seeks to recover unpaid minimum wages, overtime pay and liquidated damages totaling $304,000, the department said in a news release. The complaint was filed in the U.S. District Court, District of New Mexico.

One of the owners, reached by phone Thursday, said he was unaware of the court action.

Investigators found that the Albuquerque-based tearoom required that its dishwashers and serving staff join a tip pool, resulting in minimum wage violations, the department said.

The mandatory tip pool included employees who are not eligible for tip pools. Defendants also failed to pay the serving staff correct overtime wages, resulting in overtime violations. The defendants also failed to keep accurate records, the department said.

Under federal law, the employer may consider tips as part of wages, but the employer must pay at least $2.13 per hour in direct wages. The employer who elects to use the tip credit provision must inform the employee in advance and must show that the employee receives at least the applicable minimum wage of $7.25 when direct wages and tip credit are combined.

If an employee’s tips, combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference, the department said in a news release. Employees must retain all their tips, except to the extent that they participate in a valid tip pool or sharing arrangement.

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