BRADFORD, Vt. — A mainstay Bradford restaurant and anchor of the downtown business scene has been ordered to dish out a total of $290,000 in penalties and damages for running afoul of various federal employment practices.

The U.S. Department of Labor cited Colatina Exit, a Main Street family-style restaurant that has been in business for more than 50 years, with multiple violations in employee pay practices and ordered the eatery to compensate former and current workers a total of $239,000 in back pay and damages, the Labor Department said in a news release.

The restaurant was further ordered to pay $50,000 in punitive damages to a former food server who regulators said was fired by the restaurant for refusing to share their tips with a manager. Colatina Exit will have to fork over to the government almost another $32,000 in civil penalties for the violations, the news release said.

Colatina Exit is the second Upper Valley restaurant to land in hot water over its pay practices in the past month.

In March, New Hampshire state regulators ruled Three Tomatoes in Lebanon must pay nearly $14,000 to a long-time food server who the restaurant required to share her tips with other employees in the tip pool, which is also prohibited under state law.

The fines and penalties in both cases point to what regulators say are abuses in employment practices affecting workers at the lowest end of the pay scale. But restaurant owners contend that they face inconsistent and bewildering sets of rules between state and federal regulations governing worker pay.

The violations “hurt workers and undercut law-abiding employers who treat their employees fairly. The law requires that tips go to employees, not their manager,” Steven McKinney, wage and hour division district director with the U.S. Department of Labor in Manchester, N.H., said in a news release.

Colatina Exit violated federal labor regulations by including managers in the employee “tip pool” and also failed to pay workers time at the overtime rate when they exceeded working 40 hours per week, the Department of Labor said.

Employers and managers are barred from participating in the employee tip pool under both federal law and Vermont state law.

The restaurant also violated federal child labor law by employing two 17 year olds to make deliveries, the Labor Department said.

In the administrative settlement with the division, Colatina Exit paid $119,605 in back wages plus an equal amount in “liquidated damages” to 43 current and past employees affected by the tip and overtime violations, according to the news release.

“The Wage and Hour Division does not tolerate retaliation against employees who exercise their rights under the Fair Labor Standards Act and we will take all necessary action to protect workers and ensure they receive the wages they are owed,” McKinney said.

Vin Wendell, who has owned Colatina Exit with his wife Angela Wendell for 40 years, in an interview with the Valley News on Friday attributed the overtime violations to a compensation structure for employees they had instituted “with guidance” from the state but which — he said he later learned — did not follow federal regulations.

He said employees had been “taken off salary” and switched to an hourly rate and at the same time were granted an enhanced compensation “package” that “exceeded any overtime” and included bonuses, medical coverage and a 401(k) plan, all typical for employees in other businesses but rare in the restaurant industry.

“But the feds come in and say, well, no, according to our laws, you do have to pay overtime,” Wendell said, explaining it “didn’t check all the boxes federally and because of that we were not in compliance.”

“That was my fault,” Wendell acknowledged. “I take responsibility for it and we have corrected it and made it right.”

As for including managers in the tip pool, Wendell said the situation was complicated because “being a small business,” employees would pivot between managing one day and working as a “floater” the next.

“They weren’t being tipped as managers. They were tipped as bartenders, as hosts. We thought we were in compliance with that but we weren’t.”

In regard to employing 17 years olds as delivery drivers, Wendell said it had been cleared by his insurance carrier and he had been “unaware that there is a federal law against 17-year-old delivery drivers.”

The only violation Wendell declined to discuss was the one involving the former food server who the Labor Department said was “terminated” for refusing to share their tips with a manager.

“I can’t speak to that. I wish I could,” he said.

In total, Wendell said his tab for the various violations totaled $290,000 in expenses.

The violations covered a period of two years and he said he made the required payments within two weeks of the settlement.

“It’s a lot of money,” he said, calling it “a very expensive lesson.”

Despite the heavy financial cost, Wendell said there is a more important aspect to weigh.

“The investigation determined that there was no malice in anything we did,” he said. “My head is high in how we treat our employees.”

Contact John Lippman at jlippman@vnews.com.