DOL Finds Area Restaurants Underpaying EmployeesDecember 19, 2016
The Department of Labor has ordered a number of area restaurants to review the Fair Labor Standards Act and pay hefty penalties after finding them underpaying employees.
Attention restaurants: the DOL is seeking out employers who short their employees. The owners of restaurants in the tri-state area are paying heavily after the DOL found them underpaying workers—a problem the DOL says is “all too common in the restaurant industry.”
More about the violations
Wage and hour investigators found, after reviewing payroll records, that:
- Employers were not paying overtime when employees worked more than 40 hours per week (sometimes across multiple locations for the same company)
- Employers were not maintaining accurate payroll records
- Employers were failing to pay tipped employees at least the federal minimum wage
- Employers were requiring tipped employees to purchase uniforms
- Employers were deducting withholdings in excess of the amount permitted for child support payments.
How are the employers resolving these violations?
Restaurants have been ordered to pay back wages and civil penalties. On more than one occasion, these amounts well exceeded $100,000 in back wages and damages to underpaid workers, plus additional penalties.
In addition to this, the employers (per DOL authority) must assert that they will improve internal operations. This often requires the employer agreeing to:
- Annual training for management on complying with the Fair Labor Standards Act.
- Conducting biannual meetings to educate employees about their rights under the FLSA.
- Updating employee handbooks to include a section on employee rights (under the FLSA) and disclosing prohibited practices (i.e. improper wage deductions).
- Updating employee handbooks to include a section defining tipped and non-tipped positions.
- Hiring an independent human resource consultant for FLSA guidance and compliance.
- Have a quarterly audit performed by the FLSA consultant to determine compliance. The consultant (if need be) will create and maintain a report, submitted to the Wage and Hour Division of DOL, detailing any violations and back wages owed to affected employees.
Restaurant owners, make sure you’re complying with the FLSA and DOL regulations—you don’t want to be tacked with hefty penalties and large sums of back wages. These situations not only hurt workers and their families but it also puts violating establishments at high risk of financial trouble.
Questions about the FLSA and DOL actions? Please contact a member of our Hospitality Services Group today.