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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [06/11/2012]
Contact Name: Michael Wald or Michael D’Aquino
Phone Number: (404) 562-2078 or x2076
Release Number: 12-0989-ATL

San Jose Restaurante Mexicano in Columbia, SC, agrees to pay more than $170,000 in back wages to 11 employees after US Labor Department investigation

Investigation conducted under ongoing enforcement initiative aimed at strengthening labor law compliance in South Carolina’s restaurant industry

COLUMBIA, S.C. — San Jose Restaurante Mexicano, located on Sparkleberry Lane in Columbia, has agreed to pay 11 employees $170,666 in back wages following an investigation by the U.S. Department of Labor's Wage and Hour Division, which found violations of the Fair Labor Standards Act's overtime, minimum wage and record-keeping provisions.

The FLSA violations resulted from the employer's failure to properly compensate employees for all work hours. By reviewing payroll records and conducting employee interviews, investigators determined that tip-earning employees, such as servers, were made to rely primarily on tips for pay, and consequently earned wages that fell below $2.13 per hour, in violation of the FLSA's minimum wage provision. Additionally, other employees, such as kitchen staff, were paid flat salaries each month — without regard to hours worked — that did not satisfy minimum wage or overtime pay requirements. The employer also failed to maintain accurate records of employees' work hours and wages, as required.

The investigation was conducted under a multiyear enforcement initiative focused on South Carolina's restaurant industry, in which widespread noncompliance with the FLSA's minimum wage, overtime and record-keeping provisions has been found. Since fiscal year 2010, the division's Columbia District Office has conducted more than 200 investigations of restaurants in its jurisdiction, resulting in $1.72 million in back wages recovered for more than 1,300 employees.

"The Wage and Hour Division is committed to protecting low-wage employees in the restaurant industry, where we have found widespread FLSA violations resulting from practices such as having employees work for tips only, not recording all hours worked and failing to pay overtime compensation," said Michelle Garvey, director of the division's Columbia office, which conducted the investigation. "Our goal is to change the behavior of violators so that workers will receive their just wages, and law-abiding employers will be able to compete on a level playing field. Other restaurants should take notice of the division's ongoing enforcement initiative and ensure that they are paying their employees in compliance with the FLSA."

In addition to paying the back wages, the restaurant has agreed to future compliance by keeping accurate records of all hours worked by employees, paying all employees at least the federal minimum wage, providing overtime compensation and informing employees in advance that the tip credit will be used.

The restaurant industry employs some of our country's lowest-paid workers who, due to a lack of knowledge of the law or unwillingness to exercise their rights, are vulnerable to disparate treatment and labor violations. In addition to the initiative in South Carolina, the Wage and Hour Division has other ongoing enforcement initiatives throughout the U.S. to identify and remedy violations that are common in the restaurant industry.

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 for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay at least $2.13 an hour in direct wages provided that amount plus tips received equal 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 notice of the FLSA tip credit provisions, maintain accurate time and payroll records, and comply with restrictions that apply to workers under age 18.

Accessible and searchable information on enforcement activities by the Department of Labor is available at http://ogesdw.dol.gov/search. Publicly available enforcement data are available through the free mobile application "Eat Shop Sleep," which enables consumers, employees and other members of the public to check if a hotel, restaurant or retail location has been investigated by the Wage and Hour Division and whether FLSA violations were found. The app is available at https://sites.google.com/site/eatshopsleepdol.

For more information about FLSA and other federal labor laws, call the division's toll-free helpline at 866-4US-WAGE (487-9243) or its Columbia office at 803-765-5981. Information also is available at http://www.dol.gov/whd/.