Recent findings from the U.S. Department of Labor’s Wage and Hour Division highlight critical employment law violations at multiple establishments with the same owner. The investigation uncovered that a restaurant and supermarket, along with another supermarket, failed to comply with federal wage regulations, resulting in minimum wage and overtime violations affecting numerous workers.
31 Workers Denied Minimum Wage and Overtime Pay
Employees across these establishments were paid fixed weekly salaries for all hours worked, leading to violations of the Fair Labor Standards Act (FLSA). This payment structure failed to meet the federal minimum wage requirements for the total hours worked, resulting in minimum wage violations. Furthermore, the salaries did not include the mandated time-and-a-half rate for hours exceeding 40 in a workweek, thereby causing significant overtime violations.
Specifically at the Restaurant, some tipped servers were not compensated adequately to reach the federal minimum wage when their tips were insufficient to cover the tip credit taken by the employer. Consequently, their average hourly earnings fell below the $7.25 threshold, invalidating the employer’s tip credit and resulting in further wage violations.
The Result
The Wage and Hour Division has recovered $391,935 in back wages and liquidated damages for 31 affected workers. Jamie Benefiel, the District Director of the Wage and Hour Division in South Carolina, emphasized the necessity for employers to adhere to existing federal and state wage laws. Employers were encouraged to seek guidance from the Wage and Hour Division regarding proper payment practices to ensure employees receive their rightfully earned wages.
Employers can connect with the Wage and Hour Division through their toll-free number, 1-866-4-US-WAGE, for clarifications or assistance in understanding wage payment regulations. Additionally, both employers and workers can access valuable tools provided by the department, including a search tool to determine owed back wages and a Timesheet App available for free download in English or Spanish, ensuring accuracy in recording hours worked and pay.
Conclusion
This case serves as a stark reminder for businesses to adhere to wage laws, ensuring fair compensation for their employees. Employers must proactively seek guidance and implement appropriate payment practices to prevent violations, safeguarding both their workforce and their businesses from legal and financial repercussions.