No Items in Cart 
The U.S. Department of Labor (DOL) announced that a restaurant owner would be fined $1.3 million for wage & hour violations. Specifically, on August 22nd, 2024, the federal agency obtained a consent judgment for back wages, withheld tips, and liquidated damages. Entered in the District Court for the Middle District of Pennsylvania, the judgment follows a Wage and Hour Division (WHD) investigation. The DOL’s Office of the Solicitor also litigated the case. Generally, both departments found several violations of federal wage regulations by the restaurant and its owner. Previously, in July, the DOL announced a $12 million settlement regarding corporate-wide workplace safety compliance.
The Fair Labor Standards Act
Chiefly, the WHD found that the employer violated the Fair Labor Standards Act (FLSA). As the nation’s primary wage law and one of the major employment laws employers must follow, the FLSA establishes minimum wage and overtime protections for non-exempt part-time and full-time employees. However, under section 13(a)(1) of the FLSA, employees paid above the FLSA’s current salary basis are generally exempt from overtime provisions. To qualify for overtime exemption, employees must have been paid on a salary basis at not less than $844 per week. These exempt employees must also perform at least one of the duties of an executive, administrative, or professional employee.
Overview of the Wage & Hour Violations
Basically, the WHD found the employers violated the FLSA by requiring servers and bartenders to surrender a percentage of their tips. Comparatively, this percentage was based on the restaurant’s total sales. The tips were given to the restaurant at each shift’s end instead of contributing them to a valid tip pool. Additionally, the employers failed to record how the tips were used. Such actions made it impossible to prove the restaurant’s tip pool was valid. Likewise, it was determined the employers did not pay three non-exempt salaried cooks overtime wages for hours over 40 in a workweek.
Consent Judgment Specifics
In general, the judgment requires the restaurant and owner to pay affected workers $651,778 in back wages and restored tips. Due to the wage & hour violations, an equal amount must be paid in liquidated damages. Similarly, the employer will pay a $26,443 civil money penalty due to the willful nature of the violations. The consent judgment permanently forbids the employers from any future FLSA violations.
Employer Takeaways
In conclusion, as mentioned before, the FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked. Unquestionably, employees must also receive overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek. To help business owners and their managers comply with overtime exemption laws, and avoid wage & hour violations, WorkWise Compliance created the Overtime Exemptions Compliance Program eLearning Module. This digital solution helps employers, managers, and human resources representatives understand the DOL’s overtime rule requirements and determine if employees need to be re-classified.
