Employer name: Los Arcos Inc., doing business as Los Arcos Mexican Restaurant

Investigation sites: 214 St. James Ave.
Goose Creek, South Carolina 29445

1136 Hungry Neck Blvd.
Mount Pleasant, South Carolina 29464

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Columbia District Office, found that Los Arcos Mexican Restaurant violated overtime, minimum wage and recordkeeping provisions of the Fair Labor Standards Act.

The investigations found the employer:

• Paid cooks and dishwashers fixed salaries without regard to the number of hours they actually worked. This resulted in overtime violations when these employees worked more than 40 hours in a week without additional overtime payment as well as minimum wage violations when they worked so many hours that their salaries failed to cover $7.25 per hour.
• Failed to pay hourly workers minimum wage and overtime for hours they worked beyond 40 in a workweek.
• Required wait staff to work only for tips, resulting in minimum wage and overtimes violations.
• Reduced workers’ pay below minimum wage by charging employees for mandatory uniforms.
• Failed to maintain required time and payroll records.

Resolution: On Nov. 3, 2016, the department reached a settlement agreement with Los Arcos’ owner, Alberto Reyes. Los Arcos Inc. and Reyes will pay a total of $459,130 to 28 employees, which includes $229,565 in back wages and an additional equal amount in liquidated damages for all affected employees who worked at either of the two restaurants from Oct. 5, 2013 to Oct. 10, 2015.

Quote: “The violations found in this case are all too common in the restaurant industry,” said Jamie Benefiel, director of the division’s Columbia office. “These workers deserve to take home every penny they legally earned, and employers who play by the rules deserve a level playing field.  The department will use every tool necessary to achieve compliance and to protect workers’ rights - including the assessment of liquidated damages, and taking legal action when necessary.”

Background: Under the FLSA, an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if 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 at least the minimum wage, the employer must make up the difference. 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 managers, dishwashers, cooks, chefs and janitors. Finally, paycheck deductions for uniforms, patrons who do not pay for their orders, broken dishes or cash register shortages are illegal if they reduce an employee’s wages below the minimum wage.

Information: For more information about the FLSA, call the Wage and Hour Division’s Columbia office at 803-765-5981 or its toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd.

Date of Action: Nov. 17, 2016

Type of Action: Lawsuit

Name of Defendants:Tango Bakery Inc., doing business as Tango Bakery
Adrian Gordillo-Ross
Sergio Mendoza

Allegation: The U.S. Department of Labor has filed a lawsuit against Tango Bakery Inc. – doing business as Tango Bakery – and its two owners, Adrian Gordillo-Ross and Sergio Mendoza, after an investigation by the department’s Wage and Hour Division found that the employers failed to pay 20 current and former employees $75,218 in overtime pay in violation of the Fair Labor Standards Act.

Investigators from the division’s Dallas District Office found the Garland, Texas-based bakery failed to pay its bakers, baking helpers and front sales workers properly because they paid straight time for all hours worked and failed to pay overtime at time and one-half for hours worked over 40 in a work week. The company also failed to pay some employees for all of the hours they worked.  Additionally, on the occasion that the employer did pay overtime, they failed to include bonuses employees received for working late in the work day in the overtime rate payment made on those days. Investigators also determined the company failed to keep accurate time and pay records and falsified others, violating the FLSA’s recordkeeping requirements.

Quote: “Tango Bakery attempted to manipulate time and pay records to avoid paying employees what they had rightfully earned,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “Employees must be paid for every hour they work and employers must also maintain complete and accurate records. The division remains committed to ensuring that if you work, you get paid. As this lawsuit demonstrates, we will continue to use every tool available to us to make sure that happens.”

Resolution: The department seeks $150,437 in back wages and liquidated damages for workers, and an injunction against future violations of the FLSA by the employers. In addition, the department has filed an action with the Department of Labor’s Office of Administrative Law Judges seeking $7,700 in civil money penalties assessed against the employer and its two owners for willful violations of the Act.

Additional Information: Tango Bakery specializes in cakes and provides catering services. Tango Bakery also hosts various events, such as weddings and Quinceañeras, in a ballroom attached to the bakery.

Court: U.S. District Court for the Northern District of Texas, Dallas Division

Docket Number: 3:16-cv-03230-M

Read the News Brief in Spanish.

SCOTT, La. – Investigators have found more than $571,000 in back wages, liquidated damages and penalties resulting from labor violations at area Cajun food retailers just six months after the U.S. Labor Department’s Wage and Hour Division found violations at another local specialty meat processor.

The Best Stop Supermarket Inc., SHYY Inc. – doing business as Romero’s Grocery – and Don’s Specialty Meats Inc. violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. Violations included:

• Failing to pay workers for all hours they worked, including 15 minutes spent before and after scheduled shifts counting cash drawers.
• Deducting wages from workers’ pay illegally for cash register shortages which effectively brought their wages below the required federal minimum wage.
• Paying straight time rates, in cash “off the books,” for overtime hours worked.

Romero’s Grocery disguised wage payments as “reimbursements” to employees to avoid paying overtime and provided  federal investigators with falsified time records to falsely show they had paid workers as required by federal law. Don’s Specialty Meats made illegal pre-employment arrangements with workers to only pay for a specified number of hours on payroll checks and to pay for the remainder of their hours in cash, all at the workers’ regular hourly rates, even if overtime was worked. Investigators determined that the violations committed by The Best Stop and Romero’s Grocery were willful, prompting them to extend the period of time covered by the investigation.

“When employers fail to pay wages as the law requires, they can expect to pay double what they should have paid in the first place,” said Troy Mouton, district director for the division in New Orleans. “The Wage and Hour division will continue to use enforcement tools such as liquidated damages and civil money penalties to send a clear message – it is unacceptable for employers, in this industry or in others, to profit at the expense of the workforce who deserve a fair day’s pay for a fair day’s work.”

The Best Stop Supermarket has paid $56,386 in back wages and liquidated damages to 36 workers. The employer was also assessed $10,819 in civil money penalties for willful violations.

Romero’s Grocery paid $35,053 in back wages and liquidated damages to 33 workers. The employer was also assessed $3,927 in civil money penalties for willful violations.

Don’s Specialty Meats will pay $480,313 in back wages and liquidated damages to 133 workers.

In addition to paying back wages, liquidated damages, and penalties, all three employers entered into enhanced compliance agreements with the department to resolve the investigations. They agreed to provide annual training for managers on complying with the FLSA, and to provide FLSA handy reference guides to employees at the time of hire, among other terms.

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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must maintain accurate time and payroll records. The act authorizes the division to assess civil money penalties for each repeated or willful violation of the minimum wage and overtime requirements of the act.

For more information about federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Employer:Stars Cleaning Inc., doing business as Stars Cleaning Service

Site:14320 SW Barlow Court
Beaverton, Oregon

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found that Stars Cleaning Service paid its janitorial employees a fixed daily rate without regard to the number of hours they actually worked, resulting in violations of the minimum wage and overtime provisions of the Fair Labor Standards Act. Investigators found that the employees worked more than 12 hours a day, six days a week, on average. The daily rates, when divided by the number of hours employees worked, yielded earnings that fell below the federal minimum wage of $7.25 per hour, and did not provide an overtime premium for hours worked beyond 40 in a week.

Once the investigation started, owner Estela Ramos began harassing and intimidating the workers with immigration-related threats, directing workers to falsify time records, threatening to reduce their hours or pay and offering cash to employees to remain silent about alleged violations.

The department secured an injunction to stop the threats and intimidation, and filed a complaint against Ramos and Stars Cleaning for the unpaid wages. Soon after, the company and its owner filed for bankruptcy.  Investigators later discovered that the day after the bankruptcy filing, the owner’s son –Vismark Ramos– incorporated a new company named White Star Cleaning Inc., which continued to operate the same cleaning business, at the same location, with the same employees, and servicing the same clients as Stars Cleaning. In response, the department amended its complaint and added White Star Cleaning and Vismark Ramos as ‘successors in interest’ to Stars Cleaning. This action held White Star and Vismark Ramos liable for the FLSA violations and unpaid wages owed to workers by the previous company.

Resolution: In a consent judgment filed in the U.S. District Court for the District of Oregon on Sept. 22, 2016, a judge ordered White Star Cleaning and owner Vismark Ramos to pay $70,000 in back wages to 19 employees. The judge also ordered the defendants not to take any action to deter employees from asserting their rights under the FLSA or interfere with any investigation of wage or other violations.

Quote: “This judgment sends the clear message that an employer cannot use the bankruptcy system to avoid liability for federal wage violations,” said Thomas Silva, the Wage and Hour Division’s district director in Portland. “We will continue to use every enforcement tool available to protect employees’ rights against such employers.”

Information: 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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. The act also provides that employers who violate the law are liable to employees for back wages and an equal amount in liquidated damages.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Read this news brief in Spanish.

LEE’S SUMMIT, Mo. – Imagine being told that you and your spouse would have to split a paycheck for 80 hours of work – despite that fact that each of you worked 80 hours – or receiving your paycheck issued under a co-worker’s name because your employer was attempting not to pay you overtime.

That’s what U.S. Department of Labor Wage and Hour Division investigators found at Magic Touch Cleaning Inc. where management paid workers fixed amounts per project, without regard to the number of hours they actually worked, paid straight time rates for overtime, and falsified employees’ names, timesheets and payroll records, all violations of the Fair Labor Standards Act.

Under terms of a plea agreement in federal court for the Western District of Missouri, Gary L. Walker, owner of the Lee’s Summit-based cleaning company, will pay $196,484 in unpaid minimum wage, overtime, and damages to 40 former employees of the company. U.S. Magistrate Judge Robert E. Larsen also sentenced Walker to five years of probation.

“No worker should ever be asked to accept a payroll check made payable to another person, or to share their rightfully earned wages – both clear violations of the law,” said Ricky Robinson, assistant district director for the wage and hour division in Kansas City. “Recovering these wages makes a real difference to these vulnerable employees, who worked long hours and were not paid even the minimum wage or for overtime worked. Too often, we find unscrupulous employers taking advantage of workers with language barriers who may not fully understand their rights, or who may be afraid to step forward when those rights are violated. The judge has sent a clear message to employers – criminal violations will be pursued and the law will be enforced so that workers’ wages are protected.”

Investigators found the cleaning company violated the FLSA’s minimum wage, overtime and recordkeeping provisions by:

• Paying multiple employees with one check, made payable to just one of the workers, expecting them to share the wages, resulting in payment less than the required federal minimum wage.
• Paying for overtime hours at straight time rates, on checks made out in other employees’ names.
• Paying husband and wife teams a combined 80 hours per bi-weekly pay period and requiring them to “split” the pay, despite each of them having worked 80 hours.
• Falsifying employee’s names, timesheets and other payroll records.
• Failing to pay workers for time spent traveling between work sites.
• Failing to accurately record daily and weekly work hours and earnings paid.
• Failing to provide final paychecks to at least four workers.

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 hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law.

For more information about the FLSA, visit https://www.dol.gov/whd or call the division’s toll-free helpline at 866-4US-WAGE (487-9243).

Date of Action: Nov. 28, 2016

Type of Action: Family and Medical Leave Act complaint

Name of Defendants: Michigan Department of Health and Human Services
Kalamazoo Psychiatric Hospital

Allegations: An investigation by the U.S. Department of Labor’s Wage and Hour Division revealed that the Michigan Department of Health and Human Services and the Kalamazoo Psychiatric Hospital interfered with an employee’s FMLA entitlements and retaliated against him for taking protected leave. 

Investigators found that Michigan DHHS and the hospital expected the employee to complete the duties of a full-time employee while on leave and denied the employee a promotion to assistant director of nursing.

The employee made two requests for intermittent FMLA leave in June 2015 to care for family members, who had serious health conditions and required transportation to medical appointments.

Resolution:  The department is asking the court to issue an injunction, and require the employer to pay lost wages of at least $6,252, an equal amount in liquidated damages, and any other make-whole remedies under the FMLA, including reconsidering the employee for promotion.

The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.

Quote: “The Michigan Department of Health and Human Services has a legal responsibility to allow an eligible employee to take medical leave when provided with proper documentation,” said Mary O’Rourke, district director for Wage and Hour Division in Grand Rapids. “This worker did everything required to request leave properly, care for his family and protect his job. The Family Medical Leave Act was enacted to protect employees in just this type of circumstance so that they can request leave in order to balance both their job and family responsibilities.”

Court: U.S. District Court for the Western District of Michigan

Docket Number: 1:16-cv-01368

MINNEAPOLIS – A Minnesota-based company has agreed to pay 15,909 employees nationwide a total of $976,765 – $488,229 in back wages and an equal amount in liquidated damages – after a federal investigation found the employer violated federal minimum wage requirements at its health clubs and fitness center locations in 26 states.

Investigations by the U.S. Department of Labor’s Wage and Hour Division found Life Time Fitness Inc., a subsidiary of the Healthy Way of Life Company, took deductions for uniform costs, which resulted in workers making less than the required federal minimum wage per hour, in violation of the Fair Labor Standards Act.

“The U.S. Department of Labor takes its responsibility to ensure workers receive the wages they have earned very seriously. This agreement will put thousands of dollars where they belong – in the pockets of hardworking people and their families,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “This comprehensive agreement will ensure Life Time Fitness locations nationwide comply with the FLSA and that workers take home their rightfully earned pay.”

In addition to paying the back wages due, the company will:

• Pay civil money penalties of $99,825 for violating the FLSA.
• Conduct formal training on FLSA requirements with general managers who hire, oversee, manage and develop employment and pay practices at its locations nationwide.

“While employers are allowed to take deductions for the cost of uniforms, those deductions cannot bring an employee’s earnings below the federal minimum wage,” said David King, the division’s district director in Minneapolis. “The Wage and Hour Division offers a great deal of compliance assistance and stands ready to help workers and employers alike. Employees who have faced similar deductions or employers who have questions about how to comply should give us a call.”

Investigators found violations at the following locations:

• Fridley, Minnesota: back wages of $2,757 due to 87 employees.
• Lakeville, Minnesota: back wages of $7,895 due to 240 employees.
• Roseville, Minnesota: back wages of $1,247 due to 36 employees.
• Corporate-wide: back wages of $476,329 due to 15,546 employees at locations in 26 states.

Based in Chanhassen, the Healthy Way of Life Company is a privately held, health and lifestyle company. As of October 2016, the company operates 122 centers in 26 states and 35 major markets in the U.S. and Canada under the Life Time Fitness and Life Time Athletic brands.

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, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must maintain accurate time and payroll records.

For more information about federal wage laws, or to file a complaint, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

Date of Action: Nov. 22, 2016

Type of Action: Lawsuit settlement and entry of judgment and injunction

Name of Defendant: Han Nara Enterprises L.P.
Lubbock, Texas

Findings: The U.S.  Department of Labor and Han Nara Enterprises L.P. have resolved a lawsuit filed Nov. 8, 2016 with a consent judgment and injunction entered by the court on Nov. 22, 2016. The judgment’s entry and injunction requires Han Nara – which does business as Ashley Furniture Homestore with seven retail outlets in New Mexico and Texas – to comply with the Fair Labor Standards Act’s minimum wage, overtime and record-keeping requirements and pay a total of $161,221 in back wages and liquidated damages to pay more than 500 employees. The company will also pay $55,000 in civil money penalties for committing willful and repeat violations. Han Nara has also agreed to five years of semi-annual audits by an independent third-party auditor, to ensure its ongoing compliance.

The department’s Wage and Hour Division investigated Han Nara four times in the past nine years, each time finding that the employer failed to pay employees properly. In the most recent investigation, investigators found that the company misapplied an exemption from the FLSA’s overtime requirements intended for commissioned sales employees, and altered time cards to reduce employees’ hours and pay. Han Nara attempted to use these practices to avoid paying its employees overtime.

Quote: “This is not the first time this Ashley Furniture store operator has violated the law,” said Betty R. Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This settlement ensures that these workers will receive the wages they have rightfully earned.  Employers should take note - the costs associated with choosing to break the law extend beyond court costs to liquidated damages and civil money penalties. The resolution of this case illustrates the Wage and Hour Division’s commitment to protecting low wage workers, and leveling the playing field for law-abiding employers.”

Additional Information: The division continues to conduct investigations focusing on low-wage industries and recidivist employers. For more information about the  overtime exemption for commissioned retail workers or other information about compliance with the FLSA, visit www.dol.gov/whd/, or call 866-4US-WAGE.

Court: U.S. District Court for the Northern District of Texas.

Docket Number: 5:16-CV-256-C

Employer name: Environmental Painting Alternatives Inc.     

Investigation site: 1130 S. Rio Grande Ave.
Orlando, Florida 32805        

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Jacksonville District Office, found that Environmental Painting Alternatives – a commercial and residential painting and pressure-washing company – violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

The investigation revealed that Environmental Painting Alternatives jointly employed the workers in question with Caceres Custom Services LLC, which provided the contractor with most of its painters on an ongoing basis. As a result, both employers could be held liable for the violations disclosed. The employers misclassified workers who were, in fact, employees as independent contractors. This practice led to overtime violations when the employers paid only straight time rates to employees who worked more than 40 hours in a work week.

The employers also failed to maintain legally required time and payroll records, and failed to have a Family Medical Leave Act policy in place or to display the required poster in the workplace.

Resolution: Environmental Painting Alternatives Inc. will pay 19 employees $21,423 in unpaid overtime wages.

Quote: “The workers in this case fell victim to an all-too-common scenario – employers misclassifying employees as independent contractors,” said Daniel White, district director for the Wage and Hour Division in Jacksonville. “We are committed to routing out and eliminating this practice, in which workers are typically denied overtime, unemployment insurance, workers compensation and a host of other benefits that come with their rightful status as employees. Contractors who play by the rules must not find themselves at a competitive disadvantage to those who attempt to skirt the law for their own financial gain.”

Background: Environmental Painting Alternatives provided painting services to facilities in Orlando, Kissimmee and Miami including Walt Disney World’s Magic Kingdom, Fort Wilderness, Universal Studios, Marriott Hotel locations and the Hard Rock Stadium, formerly known as Miami Dolphin’s Stadium.

Information: The division has agreements with 35 states, including Florida, to combat misclassification of employees as independent contractors to ensure workers’ get the wages, benefits and protections to which they are entitled. The violations in this case are typical of those referred to other agencies, including the IRS, and the State of Florida Department of Revenue under this agreement.

More information regarding the Department of Labor’s initiative to combat the misclassification of employees as independent contractors can be found at http://www.dol.gov/whd/workers/Misclassification/index.htm. The FLSA requires that covered, nonexempt employees be paid for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers are prohibited from retaliating against workers who exercise their rights under the law.

For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243); the Jacksonville District Office at 904-359-9292 or visit http://www.dol.gov/whd/.

Date of Action: Nov. 15, 2016

Type of Action: Consent judgment

Name of Defendants: Puerto Rico Police Department
Commonwealth of Puerto Rico

Background: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that, between June 2010 and August 2014, the commonwealth’s police department willfully committed a number of violations of the Fair Labor Standards Act, most significantly regarding the failure to pay overtime properly.

The department requested on Oct. 19, 2016, that a federal judge approve a consent judgment requiring the police department to pay $8,732,386 in back wages and interest to 2,642 current and former police officers who did not receive all their overtime wages required under the FLSA.

Resolution: U.S. District Judge Gustavo A. Gelpí approved the consent judgement on Nov. 15, 2016. It requires the police department and the Commonwealth of Puerto Rico to pay the back wages and take additional corrective actions to pay employees properly, provide FLSA training, implement electronic recordkeeping and payroll systems and provide annual reports to the division. Details can be found in the approved consent judgment.

Quote: “This judgment ensures that that these public safety workers will be compensated properly for their important work, and that reforms are put into place to prevent such violations from occurring in the future,” said Jeffrey S. Rogoff, the department’s regional solicitor in New York, whose office litigated the case for the division.

Court: U.S. District Court for the District of Puerto Rico.
Civil Action Number:  3:16-cv-02849-GAG

Read this news release in Spanish.