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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [03/29/2012]
Contact Name: Ted Fitzgerald
Phone Number: (617) 565-2075
Release Number: 12-0445-BOS

US Labor Department initiative finds more than $1.3 million in back wages due to 478 underpaid Massachusetts employees

Ongoing labor law enforcement efforts aim to remedy violations in restaurant industry

BOSTON — An ongoing enforcement initiative conducted by the U.S. Department of Labor focused on the restaurant industry in Massachusetts has uncovered significant violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act. To date, investigations by the Boston District Office of the department's Wage and Hour Division have found $1,307,808 in back wages due to 478 employees of multiple establishments. In addition, the division now is assessing liquidated damages, payable to employees, when employers are found in violation.

"The restaurant industry employs some of our country's lowest paid workers, who are vulnerable to exploitation," said Secretary of Labor Hilda L. Solis. "In response to the extensive level of noncompliance we discovered, we will expand our efforts to bring the industry into compliance to ensure that employees receive the minimum wage and overtime wages required by law."

"Our investigations found that several restaurants violated the FLSA by paying employees flat salaries for all hours worked without overtime pay, failing to combine hours worked at multiple locations for overtime purposes, paying incorrect overtime rates to tipped employees, making illegal deductions from employees' wages and failing to keep accurate records of employees' hours," said George A. Rioux, the division's district director in Boston. "Even more serious, our investigations found an emerging trend of misclassifying restaurant workers as independent contractors in order to avoid minimum wage, overtime and record-keeping requirements of the FLSA."

Among the establishments found to have underpaid their workers are 15 Not Your Average Joe's restaurants in Greater Boston and eastern Massachusetts; six Science Partners restaurants in Cambridge and Boston, including Miracle of Science, Middlesex Lounge and Tory Row; Metropolitan Club restaurants in Chestnut Hill, Dedham and Natick; Noon Hill Grill in Medfield; T.G.I. Friday's in Framingham; Fresh City restaurants in Burlington, Needham Heights, Newton Upper Falls and Woburn; and Paul W. Marks in Everett. Previously announced cases involved D'Ann's Restaurant Inc., doing business as D'Ann's in Abington; 1760 Society Inc., doing business as The Sherborn Inn and The Sherborn Out in Sherborn; and Buchhalter Ltd., doing business as The Upper Crust Pizzeria in Salem. All the establishments have pledged full compliance with the FLSA and have paid or are in the process of paying their employees.

Over the past year, the division also has assessed a total of $295,108 in liquidated damages against Massachusetts restaurants. When warranted, the division will assess civil money penalties against employers, payable to the government, in addition to requiring back wages and liquidated damages.

Additionally, the department's Regional Office of the Solicitor, which provides legal enforcement support to the Wage and Hour Division and other departmental agencies, has obtained an order of contempt — affirmed by the 1st U.S. Circuit Court of Appeals — against Operations Management Group, which provided labor for The Sherborn Inn, D'Ann's and Paul W. Marks. OMG is being fined $1,000 each day that it fails to cooperate and provide requested records to the Labor Department. Employees jointly employed by the establishments and OMG were misclassified as independent contractors and consequently not paid required overtime for hours worked beyond 40 in a week.

The division plans to coordinate with state agencies responsible for enforcing state laws that address such violations and may refer these types of cases to the Internal Revenue Service when appropriate. The division also plans to continue outreach and educational efforts with the Massachusetts Restaurant Association to help the organization's members comply with the law.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages.

The department has a smartphone application to help employees independently track the hours they work and determine the wages they are owed. Available in English and Spanish, users conveniently can track regular work hours, break time and any overtime hours for one or more employers. This new technology is significant because, instead of relying on their employers' records, workers now can keep their own records. This and other Labor Department apps are available at http://www.dol.gov/dol/apps.

For more information about the requirements of the FLSA, contact the Wage and Hour Division's Boston office at 617-624-6700 or the division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.