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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [08/21/2012]
Contact Name: Ted Fitzgerald or Andre Bowser
Phone Number: (617) 565-2075 or x2074
Release Number: 12-1609-NEW

Lorraine Enterprises ordered to pay more than $130,000 in back wages to 26 restaurant workers in Puerto Rico following Labor Department action

GUAYNABO, Puerto Rico — The U.S. Department of Labor has obtained a summary judgment in the U.S. District Court for the District of Puerto Rico ordering a Guaynabo restaurant to pay $129,057 in unpaid minimum wages and $1,472 in unpaid overtime to 26 workers for violations of the Fair Labor Standards Act.

The judgment resolves a lawsuit filed by the Labor Department, which was based on the results of an investigation by the department's Wage and Hour Division. Investigators found that Lorraine Enterprises, doing business as Piccolo e Posto, as well as owner Lorraine Lago and general manager Pedro Gonzalez, did not inform employees that tips would constitute part of their wages. The defendants also improperly deducted fees from tipped employees' paychecks for spilled food/beverages, bringing their wages below the required minimum wage, and distributed some of that money to other employees who are ineligible to receive tips. Additionally, the investigation found that certain employees were not paid at the proper overtime rate when they worked more than 40 hours in a week.

"The defendants' actions denied employees their rightful pay and undercut those employers who choose to play by the rules and obey the law," said Jose Vazquez, director of the Wage and Hour Division's Caribbean District Office, which is located in Guaynabo. "That is unacceptable. The Department of Labor will not hesitate to pursue appropriate legal action on behalf of workers when such violations are found."

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 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 notice of the FLSA tip credit provisions, maintain accurate time and payroll records, and comply with the hours, hazardous orders and other restrictions applying 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 also is 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.

This case was litigated for the department by its Regional Office of the Solicitor in New York. For more information about the FLSA, contact the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or the division's Caribbean office at 787-775-1947. Information also is available at http://www.dol.gov/whd/.

Civil action number: 09-1625 (JAG)