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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [05/04/2011]
Contact Name: Michael D’Aquino or Michael Wald
Phone Number: (404) 562-2076 or x2078
Release Number: 11-0569-ATL

12 restaurant workers in western North Carolina to receive $245,500 in back wages following US Department of Labor investigation

ANDREWS, N.C. — Monte Alban Mexican Restaurant on Main Street in Andrews is paying $245,500 in back wages to 12 employees after an investigation by the U.S. Department of Labor's Wage and Hour Division found that the business failed to pay them minimum wage and overtime compensation as required by the Fair Labor Standards Act.

"The Labor Department is working hard to ensure that employees are properly paid for the hours they work according to the law," said Richard Blaylock, the Wage and Hour Division's district director in Raleigh. "We will not allow companies to profit by not paying their workers, and ignoring FLSA rules on minimum wage and overtime compensation."

Wage and Hour Division investigators found that, for the hours they worked, wait staff received only customer tips. Additionally, the employer required cooks and dishwashers to pay for their uniforms and deducted the costs from their paychecks, which caused their wages to drop below the federal minimum wage. These violations resulted in $183,452 owed in back wages. That amount reflects payment at the full federal minimum wage of $7.25 per hour because the employer did not strictly adhere to FLSA requirements regarding payment of wages to tipped employees, so an otherwise allowable tip credit was disallowed.

The investigation also revealed that wait staff, cooks and dishwashers were not paid overtime for hours worked in excess of 40 per week, although some worked up to 75 hours per week. Further, Monte Alban Mexican Restaurant admittedly falsified time sheets submitted to investigators and had not recorded hours worked, with the exception of a period of two months when a time clock was used. The employer stopped using the time clock because it accurately recorded employees' start and end times, preventing management from easily changing work records in order to pay for fewer than the total hours claimed by employees. Overtime wage violations resulted in another $62,048 owed in back wages.

The division has obtained a signed statement from the employer confirming that all of the violations occurred. Monte Alban Mexican Restaurant has agreed to maintain future compliance with all provisions of the FLSA by keeping accurate time and payroll records, and by paying full and proper wages for all hours of employees' work.

The FLSA requires that covered employees be paid at least the federal minimum wage for all hours worked, as well as one and one-half times their regular rates of pay for hours worked over 40 per week. Employers of "tipped employees" must pay either a cash wage of at least $2.13 per hour if they claim a tip credit against their federal minimum wage obligation, or the state mandated cash wage, whichever is greater. If an employee's tips combined with the employer's cash wage do not equal the required minimum hourly wage, the employer must make up the difference. The employer must also inform the tipped employees of the intent to treat tips as satisfying part of the employer's minimum wage obligation, and the tipped employees must be able to retain all of their tips, although they may participate in a valid tip-pooling arrangement. Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.

For more information on this investigation, contact the Wage and Hour Division's Raleigh District Office at 919-790-2742 or call the division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/.