CHATTANOOGA, TN – After an investigation by the U.S. Department of Labor’s Wage and Hour Division, Chattanooga-based Chao’s Mongolian Grill LLC will pay $48,197 in back wages to eight employees for violations of the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

Division investigators found the restaurant violated the FLSA’s minimum wage requirements when it illegally required servers to surrender 15 percent of their daily tips to the business. Investigators also found Chao’s failed to pay time-and-one-half for overtime hours worked, and failed to maintain required payroll records.

“The U.S. Department of Labor is committed to ensuring that employees receive the wages they have legally earned for all the hours they have worked,” said Nettie Lewis, Wage and Hour Division District Director in Nashville. “The Department’s work levels the playing field for employers who play by the rules. We encourage all employers to reach out to us for information about how to comply with the law.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.

ALBANY, NY – After a U.S. Department of Labor Wage and Hour Division investigation, Georgia contractor Infinite Services and Solutions and its president, Khary Lewis, who provided transportation services for the U.S. Army in New York and Arizona, have been placed on a list of bidders ineligible for federal contracts for a period of three years as a result of violations of the McNamara-O’Hara Service Contract Act (SCA).

Division investigators determined that the Atlanta-based company and its president withheld 401(k) contributions and union dues from employees’ paychecks, then deliberately failed to remit the payments to the plan and to the union while providing transportation services at the U.S. Military Academy at West Point. They also failed to pay out required vacation pay to employees upon termination of the West Point contract. The company and Lewis have since paid $280,740 in back wages and benefits to 67 employees to resolve these violations.

In a separate investigation, Division investigators found that the company and Lewis failed to pay employees required health, paid time off, and other fringe benefits required by the SCA while providing services at the Yuma Proving Ground in Arizona. The contractor will pay $101,147 in back wages to 36 employees to resolve those violations.

“When employers receive federal funds to provide services to the government, they must comply with all applicable laws to ensure that their employees receive legally required pay and benefits,” said Jay Rosenblum, Wage and Hour Division District Director in Albany.

“The U.S. Department of Labor is committed to protecting workers and to ensuring a level playing field for employers,” said Eric Murray, Wage and Hour Division District Director in Phoenix. “Violations can be avoided, and we encourage employers to reach out to the Wage and Hour Division for guidance.”

“The U.S. Department of Labor will pursue appropriate legal measures to help ensure that employers who violate the law do not gain an unfair advantage over those who obey the rules,” said Jeffrey S. Rogoff, Regional Solicitor of Labor in New York.

The New York investigation was conducted by the Division’s Albany District Office and the Arizona investigation by its Phoenix District Office. Trial Attorney Molly Theobald litigated the case on behalf of the New York Solicitor’s Office.

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor's collective bargaining agreement. For prime contracts in excess of $100,000, contractors and subcontractors must also, under the provisions of the Contract Work Hours and Safety Standards Act, pay laborers and mechanics, including guards and watchmen, at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.

For more information about the SCA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.

GUAYNABO, PR – After an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD), fuel distributor Macro Companies Inc., engaged in hurricane recovery activities in Puerto Rico, has paid $1,151,291 in back wages to 219 employees for violating the overtime provisions of the Contract Work Hours and Safety Standards Act (CWHSSA), the fringe benefits provisions of the McNamara-O’Hara Service Contract Act (SCA), and the recordkeeping provisions of the Fair Labor Standards Act (FLSA).

WHD investigators found that the Broussard, Louisiana, company paid employees performing hurricane recovery activities a fixed salary per day, without regard to the number of hours that they actually worked.  This practice resulted in overtime violations under CWHSSA when these employees worked beyond 40 hours in a workweek but were not paid an additional overtime premium, as the law requires. The employer also failed to pay employees benefits required by the SCA, and failed to record the number of hours they worked, as required by the FLSA.

Macro Companies Inc. will work with WHD to ensure that their pay practices in other projects and contracts outside of Puerto Rico comply with the law.

“No contractor should gain an economic advantage by paying workers below the wages and fringe benefits required on a contract,” said Jose R. Vazquez, District Director of the Wage and Hour Division’s Caribbean District Office. “Not only does this practice undercut what the workers involved are legally owed, it results in unfair competition for contractors who play by the rules.  Violations can be avoided, and we encourage employers to reach out to the Department of Labor for guidance.”

The SCA requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. CWHSSA requires that contractors on federal service contracts in excess of $100,000 pay workers overtime after 40 hours worked in a workweek. The FLSA requires that covered, non-exempt 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 for hours worked beyond 40 per week, and must also keep employee time and pay records.

Employees and employers in Puerto Rico and the U.S. Virgin Islands who have any questions or concerns, or wish to obtain more information about the CWHSSA, the SCA, the FLSA, and other laws enforced by the Division, may contact the Division’s Caribbean District Office at 787-775-1947 or 1-866-4-USWAGE, or by email. Information is also available at http://www.dol.gov/whd; the site includes a search tool to learn whether you may be owed back wages collected by the Division.

Read this news release Spanish.

FRESNO, CA – After a U.S. Department of Labor Wage and Hour Division investigation, Central Valley garlic grower Valley Garlic Inc. and its farm labor contractor X-Treme Ag Labor Inc. have signed consent judgments, entered by the U.S. District Court for the Eastern District of California in Fresno. The U.S. Department of Labor sued Valley Garlic Inc. and X-Treme Ag Labor Inc. for being jointly responsible in a June 2015 crash that took the lives of four farmworkers who were being transported to work, including a 16-year-old minor.

X-Treme Ag Labor Inc. and its owner Isabella Camacho entered into a consent judgment requiring them to pay $46,000 in back wages and penalties, and to be forever barred from acting as a farm labor contractor. In the judgement, X-Treme Ag and Camacho also admitted to violating MSPA’s transportation safety requirements and that they did so in connection with their work for Valley Garlic.

The consent judgment against Valley Garlic Inc. requires the company to take steps to prevent future violations and unauthorized transportation including:

• Exclusively hiring farm labor contractors that are transportation-authorized and that can legally and safely transport farmworkers;
• Specifically discussing transportation in contract deliberations with farm labor contractors;
• Auditing their fields for compliance with federal labor laws at random times during peak harvest; and
• Paying $45,900 in civil penalties.

Division investigators determined that the workers were not wearing seatbelts, the driver had no valid driver’s license, and the vehicle was unsafe. The Department brought suit under the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), which requires growers and packers to take specific steps to ensure that all farmworkers are transported safely to their fields.

“These two judgments send a message that will result in safer transportation to and from the fields for hundreds of hardworking men and women,” said Nora Pedraza, Wage and Hour Division Assistant District Director in Fresno. “The Department of Labor offers a wide variety of compliance assistance and educational opportunities for employers to learn how to comply with the law. We owe it to the memory of these farmworkers to do whatever we can to prevent any future such tragedies.”

MSPA protects migrant and seasonal agricultural workers by establishing employment standards related to wages, housing, transportation, disclosures, and recordkeeping. For general information on MSPA, please see the Employment Law Guide or the Wage and Hour Division’s MSPA fact sheet.

To operate legally as farm labor contractors, individuals and companies must register with the U.S. Department of Labor. Farm labor contractors that intend to house, transport, or drive a migrant or seasonal agricultural worker must meet special requirements. Application materials and instructions can be found online at https://www.dol.gov/whd/forms/fts_wh530.htm

Employees and employers with questions about MSPA or any of the federal laws administered by the Division should call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). All calls are confidential. More information also is available online at http://www.dol.gov/whd/.

WHITES CREEK, TN – After an investigation by the U.S. Department of Labor’s Wage and Hour Division, the U.S. District Court for the Middle District of Tennessee has ordered Music City Masonry Contractors LLC and its owners, Brandy George and Robin “Bubba” Waller, to pay $493,987 in back wages and liquidated damages to 247 employees for violating the overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA). The order comes as part of a settlement with the Wage and Hour Division, which assessed a $10,012 civil money penalty for the willful and repeat violations.

Division investigators found the contracting company paid employees straight-time rates for their overtime hours instead of the time-and-one-half required by law. The employer falsified time and payroll records to make it appear that they were paying the proper overtime. The company also failed to maintain accurate records of the hours employees worked, resulting in recordkeeping violations.

“The resolution of this investigation ensures these employees receive their rightfully earned wages,” said Nettie Lewis, Wage and Hour Division District Director in Nashville. “No employer should gain a competitive advantage by failing to pay its employees in compliance with the law. We urge all employers to make use of the tools the Department of Labor offers to explain their obligations and help them avoid violations.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.

WASHINGTON, DC – With the inclusion of key provisions related to America’s tipped workers included in the recently passed Consolidated Appropriations Act, the U.S. Department of Labor’s Wage and Hour Division (WHD) has issued a Field Assistance Bulletin (FAB) to address WHD’s enforcement of tip credit rules under the Fair Labor Standards Act (FLSA).

As a result of this legislation, workplaces may establish tip pooling arrangements between “front of the house” and “back of the house” staff, such as cooks and dishwashers. The bill vacated WHD’s 2011 regulations that barred tip pooling when employers pay tipped employees at least the full federal minimum wage.

Additionally, Congress gave the Department—for the first time—authority to prevent employers from taking employees’ tips in all circumstances. Congress enacted this bipartisan law in response to U.S. Secretary of Labor Alexander Acosta’s testimony last month before the House Appropriations Subcommittee on Labor, Health and Human Services, and Related Agencies that he would support a law barring employers from taking tips.

FAB 2018-3 confirms that employers who pay the full federal minimum wage may now allow non-traditionally tipped workers, such as cooks and dishwashers, to participate in tip pools. The FAB also confirms that WHD will immediately begin using its new enforcement tools to protect American workers’ tips—including by recovering all tips unlawfully kept by employers, and imposing liquidated damages and civil monetary penalties as appropriate.

For more information about the FLSA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd; the site includes a search tool to learn whether you may be owed back wages collected by WHD.

TAMPA, FL – Investigations by the U.S. Department of Labor’s Wage and Hour Division into rebuilding efforts in the aftermath of Hurricane Irma have resulted in 11 roofing companies paying $239,893 in back wages to 259 employees for violations of the overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

Division investigators determined all 11 companies paid employees a piece rate, without regard to the number of hours they actually worked. This practice resulted in overtime violations when the employers failed to pay employees overtime for hours worked beyond 40 in a workweek. The employers also violated FLSA recordkeeping requirements when they failed to record the actual number of hours these employees worked.

The Division found the following companies in violation: Crown Roofing LLC, Currier Roofing Co. Inc., D Peck Roofing Inc., Dura-Loc Roofing Systems, Saint Raphael Roofing Inc., and San Carlos Roofing Co., all based in Fort Myers; Campbell Roofing & Sheet Metal of FL Inc. and Roofing by Homeplus Inc., both in Cape Coral; Clyde Johnson Contracting & Roofing, Inc. of Clewiston; Gulf Coast Roofing Company Inc. of Naples; and Kelly Roofing LLC of Bonita Springs.

In addition to paying back wages, Clyde Johnson Contracting will pay $11,057 in liquidated damages to 16 employees, and Dura-Loc will pay $11,368 in liquidated damages to six employees.

“Employers must understand their obligations and responsibilities under the law. Pay practices must comply with the law,” said Wage and Hour Division District Director James Schmidt, in Tampa. “We encourage all employers to make use of the many tools the Department of Labor provides to help them understand and comply with the law, and to call us for assistance.”

For more information about the FLSA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd, including a search tool.

CAMDEN, NJ – Two companies that operate 17 Houlihan’s franchisee restaurants in New Jersey and New York and their owner Arnold Runestad will pay $5,000,000 in back wages and liquidated damages to 1,471 current and former employees to resolve a U.S. Department of Labor lawsuit alleging violations of the Fair Labor Standards Act (FLSA). The agreement is part of a consent judgment filed on April 2, 2018, that is pending review and approval by the U.S. District Court for the District of New Jersey.

The Department’s Wage and Hour Division found that Saddle Brook-based A.C.E. Restaurant Group Inc., A.C.E. Restaurant Group of New York LLC, the individual restaurants, and Runestad violated the FLSA when they denied overtime pay to employees who worked more than 40 hours a week at multiple restaurants. They also violated the law’s minimum wage requirements when they included ineligible, non-tipped employees in a mandatory tip pool, retained portions of employees’ tips, and routinely deducted money from employees’ paychecks for meals while also requiring them to pay for meals.

“The Wage and Hour Division works to ensure that employees receive the wages they have rightfully earned, and that employers who fail to comply with the law do not gain an unfair competitive advantage over those who do,” said Wage and Hour Regional Administrator Mark Watson, Jr. in Philadelphia, Pennsylvania.

“The U.S. Department of Labor will not hesitate to pursue appropriate legal measures, such as this consent judgment, so that employers commit to corrective action, restitution, and ongoing compliance with the Fair Labor Standards Act,” said Regional Solicitor of Labor Jeffrey S. Rogoff in New York.

In addition to payment of the back wages and liquidated damages, the consent judgment  requires the defendants to comply with the FLSA’s minimum wage, overtime, recordkeeping, and anti-retaliation provisions, and provide employees with a notice of their FLSA rights.

The New Jersey restaurants are located in Bayonne, Brick, Bridgewater, Cherry Hill, Eatontown, Fairfield, Hasbrouck Heights, Holmdel, Lawrenceville, Metuchen/Woodbridge, New Brunswick, Paramus, Ramsey, Secaucus, and Weehawken. The New York locations are in Farmingdale and Westbury.

The Division’s Northern and Southern New Jersey and Long Island District Offices investigated the case. Attorneys Daniel Hennefeld, James Wong, Molly Theobald, and Lindsey Rothfeder of the Department’s regional Office of the Solicitor in New York litigated the case.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.

# # #

Acosta v. A.C.E. Restaurant Group Inc., A.C.E. Restaurant Group of New York LLC, Arnold Runestad, et al

Civil Action Number: Case 1:15-cv-07149-JHR-AMD

HONOLULU, HI – After a U.S. Department of Labor Wage and Hour Division (WHD) investigation, the owners of four Ichiriki Japanese Nabe Restaurants on Oahu will pay $60,721 in overtime owed to 62 employees to resolve pay violations of the Fair Labor Standards Act (FLSA).

WHD investigators found that the employer improperly paid overtime to some employees only when they worked more than 80 hours in a semi-monthly pay period, rather than for any hours worked beyond 40 per work week, as the law requires. The employer also paid some employees straight time rates for overtime hours worked. The employer also paid managers a flat rate per day, without regard to the number of hours that they worked. This practice resulted in overtime violations when those employees worked more than 40 hours in a work week and were not paid overtime. The employer, which operates restaurants in Honolulu, Aiea and Kaneohe, also failed to keep accurate records of the number of hours employees worked, the Division found.

“When we resolve cases like this one, we protect workers and ensure that employers are competing on a level playing field,” said WHD District Director Terence Trotter, in Honolulu. “We urge all employers to use the many tools our agency offers to learn about their legal responsibilities, avoid violations and operate in compliance.”

Employees and employers with questions about the FLSA or any of the federal wage laws administered by the Division should call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). All calls are confidential.

More information is available online at http://www.dol.gov/whd/.

LUMBERTON, NC – After an investigation by the U.S. Department of Labor’s Wage and Hour Division, a U.S. District Court for the Eastern District of North Carolina has ordered Del Sol Partnership 2 Inc. and its owner, Pablo Salgado, to pay $144,884 in back wages and liquidated damages to 15 employees for violating the overtime, minimum wage, and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

Division investigators found the company paid flat salaries to some employees at its Lumberton and Red Springs restaurants without regard to the number of hours they worked. This practice resulted in overtime violations when those employees worked more than 40 hours in a workweek without overtime pay. The employer also failed to keep any records of the number of hours employees worked.

In addition, Del Sol Partnership 2 Inc. violated minimum wage requirements when it required wait staff to work only for tips, when the FLSA calls for employers to pay tipped employees at least $2.13 per hour in direct wages. An employer is then allowed to take a credit for the employee’s earned tips to satisfy the remainder of its minimum wage obligation.

The court also ruled that Salgado deliberately attempted to conceal his failure to adhere to the FLSA by underreporting the number of employees, instructing them not to cooperate with the Division’s investigators, and threatening to reduce the number of hours for each employee who requested an hourly wage.

“Employees are entitled to receive all of wages they have legally earned. The Department of Labor will use all of the tools at its disposal - including the courts when necessary - to ensure that payment,” said Richard Blaylock, Wage and Hour Division District Director in Raleigh. “Employees or employers with questions about FLSA compliance can reach out to us for help at any time.”

“Unfortunately, we find that too many employers pay their staff flat salaries, or pay wait staff tips only, failing to ensure that they receive the required minimum wage and overtime for the hours they work,” said Regional Solicitor Stanley Keen. “Not only do we ensure workers are not exploited, but we also prevent employers from gaining an unfair competitive advantage by breaking the law.”

For more information about the FLSA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd; the site includes a search tool to learn whether you may be owed back wages collected by the Division.