Restaurant Owner Fined More Than $1.6M for Unpaid Overtime Pay

This month, the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) recovered more than $1.6 million in unpaid overtime pay from a Los Angeles, California restaurant owner. The owner operates seven restaurants within Los Angeles. Overall, the charges of unpaid overtime pay affected 83 workers. In fiscal year 2022, the WHD recovered more than $27.1 million in back wages in the food service industry alone. In November 2022, the WHD recovered $1.1 million for a well-known breakfast chain’s failure to pay overtime.

Background of the Investigation

The WHD’s investigation revealed that the restaurant owner intentionally failed to pay workers the overtime pay rate for hours worked over 40 in a workweek. What’s more, in an attempt to hide the unpaid overtime pay and wage theft, the owner created false records. These false records made it appear that the affected employees worked no overtime hours.

Wage and Hour Standards Under the FLSA

Federal wage and hour standards under the Fair Labor Standards Act (FLSA) include a federal minimum wage, mandatory overtime pay, recordkeeping requirements, and protections for tipped workers. As the nation’s primary wage and hour law, it is one of five commonly cited employment laws employers should know. In general, the FLSA covers employers in the private sector, as well as in federal, state, and local governments. As of the publishing of this post, the FLSA entitles covered workers to a minimum wage and overtime pay according to the following:

• Federal minimum wage of not less than $7.25 an hour, effective July 24th, 2009.
• Overtime pay rate of not less than one and one-half times the regular rate of pay during hours worked more than 40 a week.

Created in 1938 with the enactment of the FLSA, the WHD enforces federal minimum wage, overtime pay, recordkeeping, and child labor requirements under the FLSA. In order to ensure employers succeed in their compliance efforts, the WHD keeps a team of investigators to support the enforcement of the several labor laws applicable to businesses.

Penalties for Unpaid Overtime Pay

In sum, the WHD recovered $1,651,550 in back wages and liquidated damages for 83 restaurant workers across all seven locations. The total amount comprised $825,775 in unpaid overtime pay and an equal amount in damages. Additionally, the WHD assessed $62,167 in civil money penalties for the willful nature of the restaurant owner’s violations. Principal Deputy Wage and Hour Administrator Jessica Looman stated, “Wage theft is used by unscrupulous restaurant industry employers to increase their bottom lines at the expense of some of our nation’s lowest paid workers.” The illegal practice represents a distressing trend prevalent within the restaurant industry.