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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [04/18/2012]
Contact Name: Jose A. Carnevali or Deanne Amaden
Phone Number: (415) 625-2631 or x2630
Release Number: 12-0407-SAN

US Labor Departmentís Wage and Hour Division launches enforcement and education initiative focused on Los Angeles area restaurants

Agency aims to prevent minimum wage, overtime, record-keeping and child labor violations

LOS ANGELES — The U.S. Department of Labor's Wage and Hour Division is launching an enforcement and education initiative focused on the restaurant industry in the Los Angeles area to ensure compliance with the Fair Labor Standards Act's minimum wage, overtime, record-keeping and child labor provisions. Under this initiative, the division will be conducting unannounced investigations at restaurants in the San Fernando Valley, Hollywood, West Hollywood, West Los Angeles and other areas of Los Angeles County.

"Los Angeles is home to one of the largest segments of the restaurant industry in the country, and at the same time employs a disproportionate number of immigrant workers who are especially vulnerable to illegal business practices such as unfair treatment and disparate wages," said Kimchi Bui, director of the Wage and Hour Division's Los Angeles District Office. "Our goal is to protect workers while making sure that law-abiding restaurant employers are not placed at a competitive disadvantage by those that break the law."

In the past six years, the division's Los Angeles office found that 72 percent of all restaurants investigated in its jurisdiction were in violation of the FLSA. Those violations resulted in $2.2 million in minimum and overtime back wages owed to more than 1,400 workers. During the same period, the division conducted more than 1,800 investigations of restaurants along the West Coast and found that 71 percent were violating the FLSA, resulting in more than $12 million in back wages owed to more than 9,500 employees.

Limited profit margins — particularly at low-cost, ethnic food establishments — serve as incentive for some area employers to keep labor costs low using illegal tactics. Common violations include not paying for all hours worked, having employees perform work duties "off the clock" and incorrectly designating employees as exempt from overtime. Other violations include paying nonexempt employees a flat salary regardless of any overtime hours worked, as well as paying cash wages completely "off the books," which can lead not only to employees being cheated out of proper minimum wage and overtime compensation but also to tax liabilities. Illegal deductions from workers' wages for uniforms, breakages, customer walk-outs (instances of people leaving without paying for meals) and cash register shortages also are common. Additionally, child labor violations found during previous investigations include allowing minors to operate hazardous equipment such as dough mixers and meat slicers.

Investigators will pursue corrective action when violations are found, including the collection and payment of back wages, the assessment of civil money penalties and liquidated damages, and possible litigation. Information on establishments investigated will be included in the division's enforcement database, which can be viewed online at http://ogesdw.dol.gov and is also accessible via the "Eat Shop Sleep" smartphone application, which can be found on the Labor Department's app Web page, http://www.dol.gov/dol/apps/winners.htm. Consumers, employees and other members of the public can use the app to learn if a restaurant, hotel or retail establishment has been investigated by the division and whether FLSA violations were found. Businesses will have a greater incentive to comply with the law now that their compliance track records are publicly available.

The initiative also will bring together key worker advocacy and employer associations to help share FLSA compliance assistance information with workers and employers, and to secure their cooperation in promoting industrywide compliance and accountability. Additionally, to help employers determine whether they are in compliance with child labor provisions, the division offers the Restaurant Employer Self-Assessment Tool, a confidential, online survey accessible at http://www.youthrules.dol.gov/selfassess_restaurant.htm.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. An employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees with notice of the FLSA tip credit provisions and to maintain accurate time and payroll records, as well as to comply with the restrictions on hours and hazardous occupations applying to workers under age 18.

For more information about the FLSA, call the Wage and Hour Division's national toll-free helpline at 866-4US-WAGE (487-9243) or its Los Angeles office at 213-894-6375. Information also is available at http://www.dol.gov/whd/.