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Another Restaurant Liable For Wage And Hour Violation – This Time The Check Is For $245,500.

On Behalf of | Nov 8, 2012 | Wage: Tipped Employees |

In North Carolina, a Mexican Restaurant Andrews is being required to pay $245,500 in back wages to 12 employees after an investigation by the U.S. Department of Labor’s Wage and Hour Division found that the business failed to pay them minimum wage and overtime compensation as required by the Fair Labor Standards Act.


A U.S. Department of Labor news release stated, “The Labor Department is working hard to ensure that employees are properly paid for the hours they work according to the law.” It went on to say that “We will not allow companies to profit by not paying their workers, and ignoring FLSA rules on minimum wage and overtime compensation.”


Investigators determined that, for the hours they worked, wait staff received only customer tips, and that the employer required cooks and dishwashers to pay for their uniforms and deducted the costs from their paychecks, which caused their wages to drop below the federal minimum wage.


As a result, a determination was made that $183,452 was owed in back wages, which was based on payment at the full federal minimum wage of $7.25 per hour.  Since the employer did not strictly adhere to FLSA requirements regarding payment of wages to tipped employees, the tip credit was disallowed.


The U.S. Department of Labor news release also stated that the investigation found that wait staff, cooks and dishwashers were not paid overtime for hours worked in excess of 40 per week, although some worked up to 75 hours per week. Overtime wage violations resulted in an additional $62,048 owed in back wages.


The employer admittedly had not recorded hours worked, with the exception of a period of two months when a time clock was used. The employer stopped using the time clock because it accurately recorded employees’ start and end times, preventing management from easily changing work records in order to pay for fewer than the total hours claimed by employees.


The FLSA requires that most employees be paid at least the federal minimum wage for all hours worked, as well as one and one-half times their regular rates of pay for hours worked over 40 per week.


“Tipped employees” must be paid either a cash wage of at least $2.13 per hour if they claim a tip credit against their federal minimum wage obligation, or the state mandated cash wage, whichever is greater. If an employee’s tips combined with the employer’s cash wage do not equal the required minimum hourly wage, the employer must make up the difference.


The FLSA also requires the employer to notify the tipped employees of the intent to treat tips as satisfying part of the employer’s minimum wage obligation.  Additionally, tipped employees must retain all of their tips (except when participating in a valid tip-pooling arrangement).


If you even think that your employment rights have been violated or that you might need an employment lawyer, then call the right attorney to schedule a free and confidential consultation at 866-797-6040. Spitz, The Employee’s Law Firm is dedicated to protecting employees’ rights and solving employment disputes.



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