CHARLESTON, S.C. – Investigations by the U.S. Department of Labor’s Wage and Hour Division at three Charleston area restaurants have found violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. As a result, the restaurants will pay a total of $216,586 in back wages to 26 employees.

The investigations found the employers:

• 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.

“The restaurant industry employs some of this country’s lowest-paid workers, who are often vulnerable to disparate treatment and wage violations. Failing to pay these workers the wages they have worked long hours to earn hurts them and their families, and cheats competitors who obey the law,” said Jamie Benefiel, director of the division’s Columbia office that conducted the investigations. “The Wage and Hour Division is resolute in its commitment to increasing compliance in this industry. Our investigators continue to make unannounced visits at restaurants throughout South Carolina and, where violations are found, to use every tool at our disposal to remedy them.”

The restaurants involved in the investigation are:

• El Dorado Mexican Restaurant, 1109 Savannah Highway, Charleston
• Los Reyes Mexican Restaurant, 7620 Rivers Ave. #395, North Charleston  
• Los Reyes Mexican Restaurant, 5117 Ashley Phosphate Road, North Charleston

In addition to paying back wages and committing to comply with the FLSA going forward, the restaurants owners signed an agreement with the department to:

• Procure and install a timekeeping system at each location.
• Provide workers with a record of their work hours each pay period, and allow them to make corrections should the record be inaccurate.
• Provide workers with the Department of Labor contact number as part of their wage statements.
• Post information about the division’s timesheet app in a location visible to all employees.
• Provide a copy of the department’s fact sheet on executive employees to all newly-hired managers.

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.

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 Columbia District Office at 803-765-5981 or visit http://www.dol.gov/whd/.

Date of Action: April 29, 2016

Type of Action: Appointment of receiver to cease dissipation of assets

Defendants: Enterprise Laundry Services Inc.
Margaret Matkowska

Action: U.S. District Court for the Northern District of Illinois, Eastern Division appointed Ira Bodenstein as independent receiver to take immediate possession and preserve all assets of Enterprise Laundry Services Inc., a Chicago-area commercial laundry services company. The action, by Judge Charles Norgle, comes after the company and its owner, Margaret Matkowska, dissipated corporate and personal assets recklessly and repeatedly failed to comply with three court orders to pay back wages and damages to workers for violations of the Fair Labor Standards Act’s minimum wage, overtime and recordkeeping provisions.

Under the three court orders, the employer owes back wages and damages to 61 workers, as well fines for civil contempt, totaling $249,426.63.

In violation of the court order, Matkowska recklessly dissipated at least $47,000 in corporate and personal assets since November 2015 by gambling and making large cash withdrawals at four Chicago-area casinos, sometimes using corporate payroll accounts to pay for her gambling habit. After discovering these large expenditures, the U.S. Department of Labor sought the appointment of an independent receiver to prevent further dissipation of wages and other damages owed to workers.

Judge Norgle has ordered Enterprise Laundry and Matkowska to immediately:

• Provide a financial statement detailing the value and location and contact information for any personal or corporate assets located in and outside the U.S.
• Transfer to the receivership all assets held jointly or singly or under their direct or indirect ownership or control in both the U.S. and foreign countries.
• Preserve, provide immediate access to and provide to the receiver all paper and electronic information and all other information of and/or relating to any assets.

Bodenstein, an attorney with Shaw, Fishman Glantz & Towbin LLC, will take control of the assets and liquidate them as necessary to comply with the court orders to pay back wages.

Background: An investigation by the department’s Wage and Hour Division found the Chicago-area commercial laundry service and Matkowska, violated the FLSA which resulted in the 2012 court order which enjoined the defendants from future violations.

After the company failed to pay the wages due and continued to violate the minimum wage and overtime requirements, the judge signed an Order of Civil Contempt against both the company and Matkowska on July 30, 2015. The order included fines of $150 per day until they complied. The order also required the defendants to demonstrate their compliance with the FLSA from January 2014 to the present by submitting payroll records to the division and to pay $5,000 in attorney’s fees. When they failed to comply as ordered, the court increased the daily fine to $200 and imposed additional sanctions on Nov. 6, 2015.

Quote: “Willfully ignoring court orders and gambling away corporate assets, at the expense of workers, will not be tolerated,” said Karin Chaikin, Regional Administrator for the Wage and Hour Division in Chicago. “The U.S. Department of Labor will use every tool available to us, including litigation, to ensure workers receive the money they have rightfully earned.”

Information: 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 also must maintain accurate time and payroll records.

Court: U.S. District Court for the Northern District of Illinois, Eastern Division

Docket Number: 1:12-cv-01926
Perez v. Enterprise Laundry Services Inc., Margaret Matkowska

Employer: Guadencio C. Gozum, doing business as G.C. Gozum Construction

Site: 164 Torres St., Mong Mong, Guam 96910

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found that G.C. Gozum Construction paid employees straight time rates for overtime hours worked, in violation of the Fair Labor Standards Act. The employer also failed to record and pay employees for any time worked before or after their scheduled shifts.  

Resolution: G.C. Gozum Construction admitted to the violations found. The employer has paid $183,683 in overtime back wages and an equal, additional amount in damages to 158 employees.   

Quote: “Paying overtime when employees work more than 40 hours in a week is not a choice, it is a legal obligation,” said Terence Trotter, director of the Wage and Hour Division’s district office in Honolulu. “Just as there are building standards for the construction of residential and commercial structures, there are also baseline pay standards for the workers who provide those services. The back wages and damages paid in this case should send a strong message to other contractors shorting their employees. The Wage and Hour Division is committed to making sure that workers are paid every penny they have rightfully earned.”

Information: The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage for Guam 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 also must maintain accurate time and payroll records, and are prohibited from retaliating against workers who exercise their rights under the law.

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

Date of Action: April 14, 2016

Type of Action: Fair Labor Standards Act consent judgment

Defendant: Gavri LLC doing business as Days Inn, 4056 Mt. Carmel Tobasco Rd., Cincinnati
Sandhya “Lina” Patel

Resolution: Under terms of  a consent judgment entered into U.S. District Court for the Northern District of Ohio, Western Division, Garvi LLC and owner, Sandhya Patel have paid six workers at Days Inn on Tabasco Road in Cincinnati $21,708 in overtime back wages.

Background: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that the Days Inn hotel violated the Fair Labor Standards Act’s overtime provisions.  Investigators found that the company paid clerks at their normal hourly rates, without overtime, for workweeks of up to 72 hours. Additionally, the employer paid housekeepers on a per-room basis, without regard to how many hours they worked.  This resulted in overtime violations when the housekeepers worked more than 40 hours in a week. The company also failed to maintain accurate time records as required by the FLSA.

The judgment orders the defendants  to abide by the requirements of the FLSA in the future and to:

• Create and keep an employee handbook at the front desk that includes information about wages, overtime, and work schedules, along with contact information for the Wage and Hour Division.
• Provide each new employee a copy of that handbook upon hiring.
• Provide detailed wage statements to workers each pay period, allowing them to verify their hours worked, earnings, and pay.

In 2005, a division investigation found the same violations at the company involving both their own employees and those jointly employed by the hotel and International Staffing, of West Chester. The employers paid $7,812 in back wages to three employees as a result of that investigation. 

The department called upon some of its Russian-speaking investigators to communicate with the workers in the course of this investigation.

Quote: “Most American workers cannot imagine being told to work more than 70 hours a week, almost twice the norm, without being paid overtime,” said George Victory, district director for the Wage and Hour Division in Columbus. “Hotel workers are among the most vulnerable we see, generally earning low wages, with many facing language barriers and a fear of stepping forward when subject to wage violations. The U.S. Department of Labor will use every tool available to us, including litigation, to protect the rights of these workers.”

Information: 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 also must maintain accurate time and payroll records.

Court: U.S. District Court for the Northern District of Ohio, Western Division

Docket Number: 1:16-cv-00462
Perez v. Gavri LLC

SAN FRANCISCO – A federal court has entered a consent judgment that orders a Silicon Valley electronics manufacturer to pay more than $80,000 in minimum wage and overtime back pay and an equal, additional amount in damages to its workers after the U.S. Department of Labor discovered violations of the Fair Labor Standards Act.  

Nearly $8,000 in civil money penalties were also assessed against the employer.

The department’s Wage and Hour Division investigators determined that BiTMICRO Networks, Inc. in Fremont brought computer engineers from its subsidiary in the Philippines to work in the U.S. and then paid them the same wages they earned in the Philippines, in pesos, ignoring legally required U.S. wage rates. Some workers received as little as the equivalent of $1.66 per hour, in Philippine pesos, and received no overtime pay when they routinely worked an average of 57 hours per week.

“The way these vulnerable, low-wage workers were treated by this employer is illegal, unethical, and unacceptable,” said Susana Blanco, director of the Wage and Hour Division office in San Francisco. “We will simply not tolerate employers bringing workers from Asia, or anywhere else, and failing to pay them every penny they have earned. We continue to see a pattern of U.S. companies misusing foreign worker visas by bringing them from overseas and paying them in pesos or rupees. The resolution of this case demonstrates the division’s commitment to identifying and rectifying these situations and to using every enforcement tool available to us to do so.”

The division also found that BiTMICRO violated the “hot goods” provisions of the FLSA by shipping goods produced by the Filipino employees in violation of wage laws out of state.

The consent judgment, filed in U.S. District Court for the Northern District of California, permanently enjoins the employer from future violations of the FLSA, and expressly prevents them from retaliating against any workers who assert their rights under the law. The judgment further requires the employer to provide all employees with a written notice of employee rights, and to keep electronic time records with the exact times when an employee starts and stops working.

Founded in 1995, BiTMICRO is a publicly traded tech company that develops, manufactures and deploys flash storage systems. Headquartered in Fremont, the company also has a subsidiary in the Philippines.

Enforced by the division, the FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus overtime at one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.  Employers are prohibited from retaliating against workers who exercise their rights under the law.

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

Employer: Allied Foundation Specialists Inc.

Site: 4906 Luella Ave., Deer Park, Texas

Investigation Findings: A U.S. Department of Labor Wage and Hour Division investigation found Allied Foundation Specialists Inc. violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. 

Investigators found the employer:

• Paid laborers a flat day rate regardless of the number of hours they worked per week, resulting in overtime violations when they worked more than 40 hours per week.  Workers averaged 45 hours per week during five-day workweeks, and 53 hours per week when they worked 6 days.
• Kept a record of the number of days worked by its employees, but failed to keep a record of the number of hours worked, violating the FLSA’s recordkeeping provisions.

The division’s investigation is part of its initiative to improve labor law compliance in the construction industry.

Resolution: Allied Foundation Specialists will pay $682,318 in back wages to 161 employees, keep proper records and comply with all provisions of the FLSA in the future.  

Quote: “Construction workers know the value of hard-earned wages for long, tough days especially under a hot Texas sun,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This is not the first time we’ve seen construction industry employers illegally paying flat day rates with no overtime pay. The resolution of this case should put other employers on notice if they’re paying their workers in this manner. We are committed to holding employers who violate the law accountable, so that workers are paid what they have earned, and so that employers who play by the rules do not find themselves at a competitive disadvantage.” 

Background:  Allied Foundation employs about 200 workers who perform foundation repair, house leveling, barrier root systems and sewer pipe replacements in the Houston area. This investigation is part of a broader regional enforcement initiative in the state’s construction industry. In 2015, the division recovered more than $460,000 for more than 510 construction industry workers in Texas.

Information: For more information about the FLSA, 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: April 22, 2016

Type of Action: Fair Labor Standards Act and Migrant and Season Agricultural Worker Protection Act
consent judgment

Defendant: Miguel Rosales Ruiz

Resolution: The U.S. Department of Labor has obtained a consent judgment in federal court ordering Miguel Rosales Ruiz to pay 33 workers at Southwest Michigan Produce Center in Eau Claire, Michigan, a total of $14,628, which includes $7,314 in back wages for minimum wage and overtime violations, plus an equal amount of liquidated damages. Additionally, Ruiz paid $7,300 in civil money penalties assessed for violations of the MPSA.

An investigation conducted by the department’s Wage and Hour Division found that Ruiz violated the Fair Labor Standards Act’s minimum wage and overtime provisions and the Migrant and Seasonal Agricultural Worker Protection Act’s wage payment, wage statement and recordkeeping provisions.

Investigators found Ruiz, a farm labor contractor, failed to pay workers the legally required federal minimum wage, currently $7.25 per hour, to pay them overtime at time-and-a-half for hours worked beyond 40 in a workweek, and to maintain accurate time records as required by the FLSA. Additionally, the employer failed to disclose working conditions to employees in writing, to provide wages statements, and to pay workers in a timely manner, as required by the MSPA.

The minimum wage violations resulted when Ruiz paid workers to wash, process, and pack watermelons at Southwest Michigan Produce Center on a piece-rate basis, and failed to make up the difference when piece rates earned totaled  less than the required $7.25 per hour. Overtime violations resulted from failure to pay piece rate employees overtime premium when they worked more than 40 hours in a week. 

Workers in agricultural packing or processing operations are normally entitled to overtime pay under the FLSA unless the work involves an agricultural product produced on the farm where the packing or processing is taking place.

Ruiz has also agreed to abide by the requirements of both the FLSA and MPSA in the future and to:

• Provide each worker a copy of the terms and conditions of employment on their first day of work and obtain a signed declaration of receipt in the worker’s native language.
• Provide detailed wage statements each pay period, allowing workers to verify their hours worked, piece rate earnings, and pay.
• Designate an employee to stock and maintain drinking water and sanitary facilities.
• Provide each worker with the telephone number of the State Monitor Advocate for the state in which work is being performed.

The agreement also stipulates that any violations of the order within the next five years may result in the revocation of Ruiz’s Farm Labor Contractor Certificate.

Quote:  “The work of the Wage and Hour Division helps ensure that the fruits and vegetables sold to the American people are produced under fair and equitable employment conditions,” said Mary O’Rourke, district director for the Wage and Hour Division in Grand Rapids. “This judgment sends a message to employers that unfair treatment and exploitation of migrant and seasonal farm workers will not be tolerated. These workers deserve to be paid every penny they have rightfully earned.”

Court: U.S. District Court for the Western District of Michigan, Southern Division

Docket Number: 4:13-cv-15147-MAG-RSW

SAVANNAH, Ga. – A 17-year-old worker, who died when a car fell off a hydraulic lift and crushed him in November 2015,  was operating hazardous equipment in violation of federal law at a Savannah motor vehicle shipping facility, the U.S. Department of Labor has determined.

An investigation by the department’s Wage and Hour Division’s Atlanta District Office found that Cars Loading LLC violated child labor provisions of the Fair Labor Standards Act by hiring Marco Rosales to operate a reciprocating saw, circular saw and forklift to cut and dismantle cars for overseas shipment. On Nov. 30, 2015, Rosales was working on a car when the sedan fell off the lift. He was found trapped between the vehicle and the vertical leg of the lift.

Cars Loading paid a civil money penalty of $25,450 for the child labor violations that led to Rosales’ death. The division also invoked its “hot goods” provision to prevent the interstate shipment of goods produced in violation of the minimum wage, overtime or child labor protections under the Fair Labor Standards Act. The firm did not ship anything from the establishment for 30 days after the minor’s death.

The employer also misclassified Rosales and its other employees as independent contractors, the division found. Cars Loading also failed to obtain Morales’ date of birth, and failed to keep time and pay records for their employees. The misclassification of employees as independent contractors presents a serious problem for affected employees, employers and the entire economy. Misclassification often denies employees access to critical benefits and to workplace protections afforded to employees. The company is now complying with the FLSA.

The incident also led workplace safety and health inspectors from the department’s Occupational Safety and Health Administration to open a concurrent investigation. On April 8, 2016, the agency cited the company for nine serious and two other-than-serious safety violations. The company has agreed to pay $13,860 in penalties.

“The death of this young man is a grim reminder of what can happen when minor-aged workers are illegally required or permitted to operate hazardous equipment,” said Eric Williams, the Wage and Hour Division’s district director in Atlanta. “Employing young people provides valuable experience, but experience must never come at the expense of our children’s health or well-being. This tragedy is a wake-up call to companies that employ young workers to review their labor practices to ensure that they comply with critical, legally mandated worker protections.”

Based in Savannah, Cars Loading, LLC contracts with customers who need to have their vehicles shipped overseas. The firm completes U.S. Customs paperwork, prepares vehicles for shipment and arranges transportation to port. 

The FLSA establishes a minimum age of 18 for workers in those nonagricultural occupations that the secretary of labor declares to be particularly hazardous for 16- and 17-year-old workers or detrimental to their health or well-being. Youth ages 14 and 15 may be employed outside of school hours in a variety of nonmanufacturing, non-mining and non-hazardous jobs for limited periods of time and under specified conditions. These rules must be followed unless a specific exemption applies. A list of hazardous occupations prohibited for minors is available on the division’s website at http://www.dol.gov/elaws/esa/flsa/docs/haznonag.asp More information on child labor rules can be found at http://youthrules.dol.gov/ or call the division’s toll-free helpline at 866-4US-WAGE (487-9243) for more information.

Read this news release en españól.

MINNEAPOLIS – The U.S. Department of Labor’s Wage and Hour Division will offer a comprehensive compliance seminar for federal contractors, unions and workers to provide information on the rules governing prevailing wage requirements under the Davis-Bacon Act, McNamara-O’Hara Service Contract Act, Executive Order 13495 wage rules for non-displacement of qualified workers and Executive Order 13658 establishing a minimum wage for contractors.

The seminar will be held May 3-5 at the Doubletree by Hilton, Bloomington-Minneapolis South, 7800 Normandale Blvd. in Bloomington.  

“The U.S. Labor Department is committed to ensuring that all of our stakeholders – contractors, contracting officials, unions, workers and others – understand and comply with the wage and fringe benefit requirements that apply to federal and federally assisted contracts,” said Karen Chaikin, Midwest regional administrator for the Wage and Hour Division. “We are pleased to provide the contracting community with this free prevailing wage seminar that is a key component of the division’s ongoing effort to foster good jobs through increased awareness and enhanced compliance of federal prevailing wage requirements.”

Check-in for the conference will be from 7 to 9:30 a.m. on May 3, with the program running from 9:30 a.m. to 4:30 p.m. that day. On May 4 and 5, the seminar will run from 8 a.m. to 4:30 p.m.

Seminar attendance is free; however, preregistration is required. Registration can be completed through the online registration link at Minneapolis Prevailing Wage Seminar.

For more information on DRBA, SCA and other federal wage laws related to government contracts administered by the Wage and Hour Division, call the department’s toll-free helpline at 866-4US-WAGE (487-9243) or visit the agency’s website at http://dol.gov/whd/.

PHILADELPHIA – The U.S. Department of Labor’s Wage and Hour Division is conducting a building construction survey in New York’s Jefferson, Madison, Onondaga and Oswego counties to collect data on wages paid to workers on all active building construction projects in those counties between Jan. 1, 2015 and Dec. 31, 2015, New Hampshire between April 1, 2014, and March 31, 2015. This survey is not limited to federally funded construction projects. The information provided will help establish prevailing wage rates, as required under the Davis-Bacon and Related Acts.

“Davis-Bacon prevailing wage rates should reflect the actual wages and fringe benefits paid to construction workers in the locations where the work takes place. This can only happen with full participation by the construction industry community in Jefferson, Madison, Onondaga and Oswego counties,” said Mark Watson, the division's regional administrator for the Northeast. “Participation by contractors and interested parties is crucial. Low response can lead to wage rates that do not reflect wages and incomplete wage determinations, which leads to an increase in requests for additional classifications.”

Notification letters and data collection forms, known as WD-10s, are being sent to interested parties and contractors known to the Wage and Hour Division. Data must be postmarked by Oct. 31, 2016, to be included. To complete the survey electronically, visit www.dol.gov/whd/programs/dbra/wd10/index.htm.

You do not need a letter to answer the survey. If you would like to participate, or have questions regarding the survey process or completing the WD-10 form, contact Ellen Hill at 267-687-4031.