Small and midsize business owners take heed of a recent case that underscores the severe consequences of employee retaliation and violations of employment laws. An operator of a restaurant franchise in Manhattan has faced substantial penalties after engaging in unlawful practices during a U.S. Department of Labor’s Wage and Hour Division investigation.
Employer Owes $3,907 in Back Wages and Liquidated Damages to 18 Employees
The investigation revealed that the restaurant franchise violated the anti-retaliation provisions of the Fair Labor Standards Act (FLSA) when it pressured an employee to sign a document falsely claiming that there were no violations, that they had been paid in full, and that there had been no threats or poor treatment. To make matters worse, the employer also instructed the employee to return any wage payment received, and later, they terminated the employee.
But that wasn’t the extent of the violations. The restaurant franchise was also found to be in violation of federal minimum wage, overtime, and recordkeeping requirements. They failed to compensate employees for training time, paid some employees straight time for all hours worked, and kept inaccurate records of the total hours worked by employees.
To rectify these violations, the restaurant franchise had to pay $10,000 in punitive damages to the former employee who was retaliated. Additionally, they disbursed $3,907 in back wages and liquidated damages to 18 employees. This recovery addressed the unpaid minimum wage owed to all 18 employees and provided overtime wages to three employees who had not received them.
The Wage and Hour Division’s Response
Jorge R. Alvarez, the Wage and Hour Division District Director in New York, emphasized the seriousness of retaliation and the commitment of the U.S. Department of Labor to protect employees, stating, “Requiring employees to lie to federal investigators isn’t and should never be a condition of employment. This investigation reminds employers that the U.S. Department of Labor will not tolerate such behavior and will seek to recover wages owed to employees. We take allegations of retaliation very seriously and urge workers to contact their nearest Wage and Hour Division office with any questions or concerns.”
The FLSA mandates that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and receive overtime pay at a rate not less than time and one-half the regular rate of pay for all hours worked beyond 40 in a workweek. Furthermore, it prohibits employers from firing or taking adverse actions against employees for exercising their rights.
Conclusion
The restaurant franchise case serves as a vital reminder to business owners of all sizes that violating employment laws can lead to significant financial penalties and damage to a company’s reputation. Retaliation against employees is not only illegal but can result in costly repercussions. This case should prompt employers to prioritize adherence to employment laws, treat employees fairly, and create a work environment that safeguards the rights and well-being of their workforce. Complying with employment laws is not just a legal obligation but a moral duty that cannot be overlooked.