Articles Posted in Restaurants

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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:

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The Tampa District Office of the Department of Labor Wage & Hour Division found that the restaurant, Hibachi Buffet, failed to properly pay its servers and kitchen workers under the Fair Labor Standards Act (“FLSA”). The investigators found that the restaurant violated the overtime, minimum wage, and record keeping requirements of the FLSA. The restaurant did not pay its kitchen employees overtime pay for the hours worked beyond 40 in a workweek and did not compensate its servers beyond tips, room and board.

The restaurant agreed to pay 12 employees over $48,000 in back wages plus an equal amount in liquidated damages for a total of over $97,000. Under the FLSA, employers can be required to not only pay back wages but also “liquidated damages” which are also call “double damages” because they double the damages entitled to employees.

The DOL stated that “[u]nderpaying and improperly paying workers cheats them out of their hard-earned income and puts those responsible employers, who play by the rules, at a competitive disadvantage. We strongly encourage workers who may be in similar situations, where their employer is not paying overtime after 40 hours of work in a workweek or paying the correct minimum wage pay, to contact us with the knowledge that the information they share is kept confidential under the maximum extent of the law.”

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As part of the Department of Labor’s (“DOL”) continued focus on restaurant employees, a chain of three restaurants in New York have been ordered to pay over $1,000,000 in back wages including minimum wage and overtime. The DOL’s investigators found that the restaurant employees employed as servers and kitchen staff were not paid wages of at least hourly minimum wage and not paid proper compensation for overtime. The investigation also revealed that the restaurants kept inaccurate and incomplete records pay and hours of the employees.

Under the federal Fair Labor Standards Act (“FLSA”), restaurant employees must be compensated at least minimum wage of $7.25 per hour and one and one-half times this rate for overtime hours – all hours over 40 in a workweek. Under the FLSA, restaurants are also allowed to pay tipped workers $2.13 per hour plus tips. However, their tips must be high enough to allow the workers to make at least $7.25 per hour.

Restaurant employees are regularly underpaid for their work and their recovery under the FLSA can be substantial. Restaurant employees (servers, waiters/waitresses, hosts/hostesses, bartenders, bussers, barbacks, kitchen staff, etc.) can learn about their rights to pay under the FLSA by contacting Atlanta overtime attorneys.

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This year, the Department of Labor (“DOL”) focused on restaurants to determine whether restaurant employees were properly paid. The response was a resounding statement that the restaurant industry is vulnerable for minimum wage and overtime violations under the Fair Labor Standards Act (“FLSA”).

One problem is that restaurant employees do not know that their rights are being violated. Restaurant employees are some of the lowest paid employees in the nation and are paid even less when restaurants violate the FLSA when paying them. It’s important that restaurant employees learn how they should be paid under the FLSA. Hourly restaurant employees must be paid at least $7.25 per hour and one and one-half times this hourly rate for all hours over 40 in a workweek. The FLSA allows restaurants to compensate tipped employees just $2.13 per hour plus tips as long as their regular rate is at least minimum wage. Also, the federal regulations allow restaurants to require their tipped employees to participate in tip pools. These tip pool regulations are very specific and only allow certain employees to participate in the tip pools.

As part of the DOL’s restaurant investigation, Pancho’s Mexican Restaurant I, II and III – and Papa’s and Beer Mexican Restaurant agreed in October to pay 85 employees $485,913 in back wages due to minimum wage and overtime FLSA violations. The federal violations included paying kitchen staff a set salary without regard to the number of hours the employees worked and not providing additional compensation to tipped employees whose $2.13 per hour plus tips did not always equal at least minimum wage for each hour worked.