Articles Posted in Restaurants

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:

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.

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.