At our firm, we represent employees in federal, New York, New Jersey and local wage-and-hour laws. A recent federal investigation of Syracuse restaurants found violations of the Fair Labor Standards Act, commonly referred to as the FLSA. This case illustrates several common wage-and-hour issues that come up in employment relationships.
The Findings of the Wage and Hour Division
The U.S. Department of Labor (“DOL”) has a Wage and Hour Division, which investigates and enforces the FLSA. On August 12, 2019, the DOL issued a news release about its investigation of the wage-and-hour practices of a Syracuse restaurant with three locations.
As a result of the investigation, the employer paid $92,007 in back wages owed and an additional award in the same amount as liquidated damages (money payments set by law that function like a fine or punishment) to 103 current and former employees.
The FLSA violations included:
- Overtime: The employer paid overtime wages in cash and at the regular rate of pay instead of at a rate at least 1.5 times the regular rate of pay. Additionally, the employer counted its employees’ total hours worked per week at each restaurant location separately and failed to combine the hours employees worked at each location when determining if employees were entitled to overtime wages. The employer also failed to pay a manager his guaranteed weekly salary when he worked less than 40 hours per week, essentially compensating the manager as an hourly employee and making him no longer exempt from the overtime requirements of the FLSA.
- Recordkeeping: The employer failed to post an informational poster about the minimum wage required by the FLSA.
- Minimum wage: An employer claiming a tip credit for its tipped employees may require its tipped employees to contribute to a tip pool. However, a valid tip pool may only include tipped employees. The Syracuse restaurant violated the minimum wage requirements of the FLSA by requiring its tipped employees to contribute to a tip pool that included non-tipped employees, such as cooks and managers.
These types of FLSA violations are not uncommon. Employers and employees alike with questions about wage-and-hour law compliance should seek legal advice.