Published on:

Department of Labor Finds College Town Restaurants In Violation Of Overtime And Minimum Wage Laws

On March 3, 2016, the Department of Labor (DOL) issued a press release regarding its enforcement initiative in the hospitality/restaurant industry in “college towns” stating that many companies are in violation of the Fair Labor Standards Act (FLSA) wage and hour laws.  The DOL has collected almost $100,000 for workers who were not paid properly.

During the investigation, the DOL found that because hospitality jobs are likely filled by students, temporary, or foreign workers who are often unfamiliar with wage laws.  Additionally, it found that language barriers, fear of retaliation, and fears of immigration status can cause these individuals to not exercise their rights allowing companies to take advantage of them.

Some of the violations found by the DOL include:

  • Compensating employees a set salary regardless of the number of hours they worked leading to overtime violations when the employees work more than 40 hours in a week.
  • Not paying overtime (time and a half) for all hours over 40 in one workweek. Employers may not only pay overtime after 80 hours in a two-week period.  Overtime must be paid after 40 hours in a workweek, regardless of how often an employer pays employees.
  • Deducting the cost of uniforms, breakage fees, etc. from workers’ pay, thus reducing workers’ effective hourly wages to below the federal minimum wage.
  • Improperly calculating overtime for tipped employees. For more information on tipped employees.

Employers are required to pay nonexempt employees at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week.  The FLSA regulations require an employer of a tipped employee to pay no less than $2.13 an hour in direct wages, provided that amount plus the tips received equals at least the federal minimum wage of $7.25 per hour.  Additionally, if the employer requires the employee to turn in any tips or participate in a “tip pool,” it must abide by very strict tip pool regulations.

If an employer is found to have violated the FLSA minimum wage, overtime, or tip pool regulations, employees are entitled to lost wages as well as liquidated damages a/k/a double damages as well as attorneys’ fees and costs.