Swahili Village in Newark keeps 30% of its mandatory 18% service charge for operating costs; staff previously received all of it. Workers say they were fired for questioning the change; the owner denies firing anyone. A labor lawyer says the policy is legal.
Owner Kevin Onyona says 70% of the charge goes to service-team compensation, while voluntary tips are separate and go directly to employees. He says no one was fired for questioning the policy and some workers chose to leave. The change took effect Aug. 3; employees were emailed about it Aug. 6. The video caption says the workers offered to return Sept. 14 but were refused and threatened with police.
Labor attorney Charles J. Kocher said mandatory service charges are not tips under federal and New Jersey law, so restaurants may decide how to distribute them. He said employers must still ensure pay reaches New Jersey’s $15.92 hourly minimum; tipped employees may receive $6.05 an hour plus tips, with employers making up any shortfall. In 2024, Swahili Village paid $125,000 in penalties over unpaid overtime at its New Jersey restaurant and more than $525,000 in restitution and penalties to settle a Washington, D.C., case that included allegations of failing to distribute tips.
