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Press Releases

U.S. Department of Labor
Wage and Hour Division
Release Number: 11-1515-ATL (518)

Date: 

Oct. 31, 2011

Contact: 

Michael D’Aquino or Michael Wald

Phone: 

(404) 562-2076 or (404) 562-2078

Tennessee restaurant company to pay back wages, penalties for willful and repeated violations following US Labor Department investigation


KINGSPORT, Tenn. -- Atlas Inc., doing business as two La Campina Mexican Grill restaurants in Piney Flats and Kingsport, has agreed to pay $39,232 in minimum and overtime back wages to 23 restaurant workers after investigations by the U.S. Department of Labor’s Wage and Hour Division disclosed willful and repeat violations of the Fair Labor Standards Act at both locations. The department also assessed $4,301 in civil money penalties for these willful and repeat violations. The company was investigated previously by the division in 2008 and found to be in violation of the FLSA’s record-keeping requirements.

"The Wage and Hour Division is committed to strengthening compliance in Tennessee industries that employ low-wage workers, such as restaurants, where we often find FLSA violations due to practices like requiring employees to work only for tips or not recording all hours worked, to avoid making legally required overtime payments,” said Sandra Sanders, director of the Wage and Hour Division’s Nashville District Office. “FLSA provides protection not only to workers, but also to employers who depend on the Labor Department to ensure that no company receives an unfair advantage by dodging the law."

Investigations conducted by the Wage and Hour Division’s Knoxville Area Office revealed that the company willfully and repeatedly failed to record and compensate employees for all hours of their work, in violation of the FLSA’s minimum wage, overtime and record-keeping provisions. After conducting employee interviews and reviewing payroll documents, investigators determined that restaurant workers were often made to work more than 40 hours per week – without regard to overtime compensation – and were paid a flat salary that did not yield at least the minimum wage of $7.25 for all hours of their work. Investigators also found that the company created and maintained inaccurate records of its employees’ work hours, rates of pay and wages actually paid.

La Campina Mexican Grill restaurants and owner Ricardo Sanchez have agreed to come into compliance with the FLSA, and have committed to implementing new business procedures to record and compensate employees accurately for all hours of their work, in accordance with the law.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to keep accurate records of all hours worked by covered employees.

The FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees that is equal to the difference between the required cash wage, which must be at least $2.13 per hour, and the federal minimum wage. Employers may create a tip-pooling or sharing arrangement among employees who customarily and regularly receive tips, but a valid tip pool may not include employees who do not customarily and regularly receive tips, such as dishwashers, cooks, chefs and janitors.

For more information about the FLSA, call the Wage and Hour Division’s Knoxville office at 865-545-4619, or the division’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available on the Internet at http://www.dol.gov/whd.

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U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.