Employer: St. Luke’s Regional Medical Center

Sites: 390 E. Bannock, Boise, Idaho

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found systemic violations in St. Luke’s Regional Medical Center’s administration of the Family and Medical Leave Act. As a result of the violations, the employer failed to ensure that all employees on FMLA-covered leave received all the protections due to them under the law. Violations included failing to maintain employees’ benefits while they were absent from their jobs during protected leave, and failing to ensure that employees, upon returning to work, were reinstated to job positions equivalent to those they held before going out on FMLA leave.   

Resolution: St. Luke’s cooperated fully during the investigation and immediately remedied the violations. The employer corrected all administrative errors, potentially affecting approximately 13,000 employees throughout the state.

Quote: “This resolution provides piece of mind for employees of St. Luke’s and their families who rely upon the FMLA’s critical workplace flexibility and protections,” said Thomas Silva, district director for the Wage and Hour Division in Portland. “We are very pleased that this employer took immediate action to ensure that employees receive all the benefits they are entitled to under the FMLA. Workers should never have to choose between their jobs and their health.”

Information: The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.

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/.

CORPUS CHRISTI, Texas – A U.S. Department of Labor Wage and Hour Division investigation uncovered that the Nueces County Sheriff’s Office altered employee time sheets and did not pay its employees legally required overtime compensation.

The division’s McAllen District Office investigators found the Sheriff’s Office violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. The department routinely altered time sheets to reflect only the scheduled work hours, and failed to accurately reflect any additional time worked. The department also failed to keep accurate records, as required by law. Affected employees included corrections officers, cadets in the corrections department, patrol and civilian employees.

“These hard working employees, who put themselves in harm’s way every day, deserve to be paid every penny they have rightfully earned,” said Betty Campbell, Southwest regional administrator for the Wage and Hour division. “Their jobs are to protect the rest of us, yet in this case, they were the ones who needed protection.  The resolution of this case should send a strong message to other employers who may be shorting their workers – no one, including a law enforcement agency, is above the law. Our division will continue to use every enforcement tool available to ensure a fair day’s pay for a fair day’s work.”

Following the investigation, the Sheriff’s Office paid $717,000 in back wages to 473 employees, and was assessed more than $52,000 in civil money penalties. In an agreement with the federal government, the Sheriff’s Office is required to:

• Implement a bio-metric sign-in system for all county employees to track working hours.
• Train all newly elected officials, managers, front-line supervisors, record keeping personnel and human resource staff in the FLSA’s minimum wage, overtime, and record-keeping requirements.
• Provide current and future employees with information about legal protections covering payment for hours worked, rest and meal breaks.
• Provide a method for employees to file anonymous complaints.
• Prohibit the discharge of or discrimination against any employee who raises concerns.
• Provide employees with information concerning FLSA anti-retaliation provisions.  
• Provide general notice of FLSA protections to its employees.

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.

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(s):

Investigation sites: Various locations in the Charleston, South Carolina area.

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Columbia District Office, found the employer violated overtime, minimum wage and recordkeeping provisions of the Fair Labor Standards Act at 13 establishments in the Charleston area. Specifically, the division found minimum wage violations of the FLSA that stemmed from the employer’s practice of requiring servers to give a percentage of their tips back to the employer, and requiring three servers to work for only tips. Under the FLSA, tips are the property of the employees who receive them; however, restaurant operators can benefit by claiming a credit, based on the tips, toward their obligation to pay those employees the full minimum wage. When an employer does not comply with the requirements to use the tip credit, the credit may be denied and the employer will be required to pay the full federal minimum wage, currently $7.25 per hour for all hours worked. The employer also required workers at some locations to purchase their uniforms, which reduced their earnings below the minimum wage. The division also found the employer failed to pay cooks, dishwashers and runners for all hours worked which resulted in these employees not earning minimum wage for all of their hours and not receiving time-and-one-half for their hours worked beyond 40 in a workweek. The employers failed to keep legally mandated time and attendance records.

Resolution: On April 18, 2016, Judge C. Weston Houck, of the U.S. District Court for the District of South Carolina, Charleston Division, approved a consent judgment between the department and La Hacienda and its owners, Antonio Ayala and Jaime Tinoco. La Hacienda and its owners will pay a total of $1,179,045 to 119 employees, which includes $589,523 in back wages and an additional equal amount in liquidated damages for all affected employees who worked at any of the 13 restaurants from Aug. 13, 2011 to Dec. 13, 2014. The employers have agreed to comply with the FLSA. The investigation was litigated by the department’s Regional Office of the Solicitor in Atlanta.

Quote: “Our investigation of these 13 Charleston-area restaurants found many low-wage employees working long hours without any overtime compensation and, at times, earning wages far below the federal minimum wage. Labor violations like these are unfortunately all too common in the restaurant industry,” said Jamie Benefiel, director of the division’s Columbia office. “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 assess liquidated damages – where appropriate – to remedy widespread labor violations and ensure a level playing field for law-abiding employers.”

Information: Under the FLSA, when customers tip employees, restaurant operators can benefit by claiming a credit toward their obligation to pay those employees the full minimum wage. An employer that claims this tip credit is required to notify its employees of its intention to take a tip credit, and to pay a tipped employee not less than $2.13 per hour in direct wages. If an employee’s tips, when added to the wages paid directly by the employer, do not equal the federal minimum wage of $7.25 per hour the employer must make up the difference. The federal minimum wage of $7.25 per hour was last increased in 2009, and the minimum cash wage for tipped workers was last increased in 1991. Tips are the property of the employee who receives them. The FLSA also requires that employees receive time and one-half their regular rate of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

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/. 

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Date of Action: April 12, 2016

Type of Action: Lawsuit seeking debarment from future government contract awards

Name of Defendant: Carney W. Potter, doing business as Arrowhead Starr Co. and Carney W. Potter, individually, in Plainview, Arkansas. Arrowhead Starr is a forest maintenance contractor that provides reforestation services to the federal government.

Allegation: The U.S. Department of Labor sued Carney W. Potter, doing business as Arrowhead Starr Co. and Carney W. Potter individually, seeking to debar both from future government contract awards as the result of a long history of failing to pay workers the wages they were legally due. The latest violations disclosed by the department’s Wage and Hour Division occurred when the employer violated the McNamara-O’Hara Service Contract Act by failing to pay 14 employees more than $10,000 in legally required fringe benefits, including  vacation and holiday pay. The employer’s history of violations began in 2001; since 2008, the Wage and Hour Division has collected more than $130,000 in back wages paid to more than 70 workers.

Quote: “Reforestation is hard and dangerous work often performed in remote worksites. Many of these workers have little knowledge of their rights under the law, and depend on their employer to pay them what is legally required,” said Betty Campbell, the division’s Southwest regional administrator. “Contractors bid on government-funded contracts knowing their responsibilities. Failing to pay employees all their wages and benefits for the work they performed is unacceptable. This case should serve as a warning to other contractors performing work on government contracts – the Wage and Hour Division will use every tool available – including debarment, to protect workers and hold employers accountable.”

Resolution: The division’s most recent investigation recovered approximately $10,090 in SCA back wages for 14 employees. The department also seeks to declare Carney W. Potter individually and doing business as Arrowhead Starr Co., ineligible to receive any further federal contacts for a period of three years.

Information: Debarment is an important and effective tool the department uses to ensure that employers pay workers as the law requires, and that the federal government is doing business with responsible contractors. Employers who fail to comply with the law risk debarment and face losing the ability to do business with the federal government. 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.

Court: Office of Administrative Law Judges

Docket Number: 2016-SCA-00009

SAN FRANCISCO – A San Leandro-based human resources outsource provider will pay $1 million in back overtime wages and damages combined to hundreds of employees after a U.S. Department of Labor investigation that found widespread Fair Labor Standards Act violations.

The department’s Wage and Hour Division cited TriNet Human Resources Corp. for failing to pay time-and-a-half to 267 employees who worked more than 40 hours per week. As a result, the company will pay back pay wages and damages to workers in amounts ranging from a few hundred dollars to more than $13,000 for one worker. The division also assessed $58,000 in civil penalties for the violations.

In 2012, the company paid $326,000 in back wages and damages after the division found similar violations.

“TriNet falsely believed that raising an employee’s salary exempted them from receiving overtime pay,” said Susana Blanco, the division’s Wage and Hour director in San Francisco. “Hopefully, the company will now pay better attention to the rules going forward and pay its employees the wages they earned.”

TriNet provides human resources outsource solutions to small and midsize businesses. It offers payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance.

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

Employer name: Los Arcos Seafood & Grill Inc., doing business as Los Arcos Mexican Grill & Seafood Jose Gutierrez, Jr.
Martin Romo

Investigation site: 3798 Nolensville Road, Nashville, Tennessee 37211

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Los Arcos Mexican Grill & Seafood violated minimum wage and overtime provisions of the Fair Labor Standards Act. The employees were working as cooks, dishwashers and servers. Their employer paid the workers a salary for all hours worked, but not overtime for hours beyond 40 in a workweek as required. In some pay periods, the parties involved did not pay employees the current federal minimum wage of $7.25 per hour. The department filed a complaint on Nov. 1, 2012, in U.S. District Court for the Middle District of Tennessee against Los Arcos Mexican Grill & Seafood and owners Jose Gutierrez, Jr., and Martin Romo. Gutierrez and Romo were subject to a prior injunction issued in September 2009 that required compliance with the FLSA.

Resolution: On April 13, 2016, a federal judge from the U.S. District Court for the Middle District of Tennessee, Nashville Division, approved a consent judgment between the department and Los Arcos Mexican Grill & Seafood, Gutierrez and Romo. As a result, Los Arcos and its owners will pay 44 employees a total of $175,000, which include back wages and liquidated damages. The judgment also requires Gutierrez and Romo to hire a consultant to audit their restaurants for three years and submit quarterly reports to the division. Additionally, the owners have agreed to provide current and prospective hires with information on the FLSA and to purchase an ad in a local Hispanic newspaper regarding compliance with the FLSA. The division’s Nashville District Office conducted the investigation and the department’s Regional Office of the Solicitor in Nashville litigated the case.

Quote: “The outcome of our investigation of Los Arcos Mexican Grill & Seafood and its owners demonstrates that the underpayment of employees’ wages is unacceptable, and will not be tolerated. The U.S. Department of Labor will use all available tools, including litigation, to identify and root out such labor violations and make whole the affected workers,” said Nettie Lewis, director of the division’s Nashville District Office. “The violations found in this investigation are unfortunate and all too common in the restaurant industry. We will continue our industry enforcement effort to protect workers’ rights and the interests of employers that obey the law and face unfair competition from those who do not.”

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 Nashville District Office at 615-781-5344 or visit http://www.dol.gov/whd/.

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Employer: ViaSource Solutions Inc., formerly INW Contact LLC, a call-center provider to businesses that market products on television infomercials

Location: 223 East Thousand Oaks Blvd., Suite 222, Thousand Oaks, California

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found ViaSource Solutions misclassified hundreds of call-center agents as independent contractors rather than employees, and subsequently denied them minimum wage and overtime for hours they worked, in violation of the Fair Labor Standards Act. The firm also failed to pay employees for time spent in training, creating additional violations of the FLSA.   

Resolution:  ViaSource has reclassified all call-center agents as employees and will pay $101,491 in back wages for minimum-wage violations to 435 employees plus $48,893 for unpaid overtime due to 165 employees.  

Quote: “The resolution of this investigation of ViaSource Solutions sends a clear message to employers who try to reduce overhead costs at the expense of their workers,” said Kimchi Bui, director of the Wage and Hour Division in Los Angeles. “Whether a worker is an employee or an independent contractor under the FLSA is a legal question, determined by the actual employment relationship – not by any title, or any agreement between an employer and employee. We take worker misclassification very seriously, and will hold employers accountable to classify workers properly and to provide them with all the benefits entitled by law.”

Information: Misclassifying employees as independent contractors or some other nonemployee status often denies them minimum wage, overtime, workers’ compensation, unemployment insurance and other workplace protections. Employers often intentionally misclassify workers to reduce labor costs and avoid employment taxes. 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/.

Employer: C and D’s Guest Homes, Inc., provider of residential care services for adults with developmental disabilities, doing business as C and D’s Guest Home and New Horizon’s Residential

Sites: 2960 Palomino Lane, Atwater, California (main office)
336 Judy Drive, Atwater, California
263 Elm Ave., Atwater, California
3626 Langtry Ave., Merced, California
804 East Clinton Ave., Atwater, California
6314 Atwater Jordan Road, Atwater, California
2585 Roselle Drive, Merced, California (doing business as New Horizon’s Residential)

Investigation findings:  The U.S. Department of Labor’s Wage and Hour investigators found C and D’s Guest Homes in violation of overtime, minimum wage and record-keeping provisions under the Fair Labor Standards Act. The employees received overtime pay only after working 80 hours in a two-week pay period rather than after the 40-hour weekly threshold. The employer also paid a differential to employees working a split shift, and did not include the differential when computing the worker’s overtime rate. Additionally, the firm deducted eight hours of sleep time from 24 hours shifts regardless of repeated interruptions throughout the night, resulting in employees earning less than the current federal minimum wage of $7.25 per hour. 

Resolution: C and D’s Guest Homes will pay 31 workers $43,582 in back wages. The employer will install a timekeeping system for employees to record their worked hours.

Quote: “This industry employs some of the most vulnerable, low-wage workers we see, working in a field plagued by labor violations,” said Richard Newton, director of the Wage and Hour Division’s Sacramento District Office. “The division continues to fight this disturbing wage violation trend in residential care facilities, which harms not only workers and their families, but creates a competitive disadvantage for those businesses that follow the law.”

Information: For more 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: Litke Investments LLC, a San Francisco-based real estate investment enterprise, acquires, maintains and manages hotels and residential apartments.

Sites: Numerous hotels and apartments operating under various legal and trade names in California, Texas, Oregon and North Dakota.

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found Litke Investments:

• Violated the overtime provisions of the Fair Labor Standards Act when it improperly classified hourly-paid property managers and exempt from receiving overtime and paid them at straight time rates for hours worked.
• Incurred further overtime violations when it paid other workers straight time for hours worked beyond 40 per week.
• Failed to combine the hours worked by employees working at multiple locations throughout the week when determining whether overtime was due.
• Did not keep complete and correct time records for employees, in violation of FLSA’s record keeping provisions.

The division investigated Litke in 2011 and found similar overtime violations.

Resolution: The owner of Litke Investments has paid $51,429 in overtime back wages and an equal, additional amount in liquidated totaling $102,858 to 75 employees. In addition, the company paid civil money penalties totaling $8,030 due to the willful nature of the repeated violations found.

Quote: “Litke Investments deprived its workers of hard-earned overtime wages to which they are entitled by law,” said Susana Blanco, director of the U.S. Department of Labor’s Wage and Hour Division in San Francisco. “Other employers should review their pay practices to ensure that they are in compliance. The back wages, damages and penalties paid in this case demonstrate that the department is determined to ensure workers receive a fair day’s pay for a fair day’s work. We will stop those employers who skirt the law so that we ensure other businesses can compete fairly.”

Information: For more 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.

FLSA: 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.

NEW YORK – Nail salon workers in one of the world’s largest cities work hard to serve their customers. At the same time, they are what the U.S. Department of Labor refers to as vulnerable workers – unaware of their rights, sometimes with language barriers, or reluctant to step forward to complain.

Working amid possible health hazards, nail salon workers also frequently go home underpaid or not paid at all for their labor. The Wage and Hour Division is actively determined to address this injustice as shown by its actions involving two New York City salons found to be in violation of federal overtime and recordkeeping rules.

The division’s investigators found that Ada Nails & Spa, at 81 W. Broadway in Manhattan, paid employees a flat rate per day plus commissions without regard to the number of hours they worked. Consequently, the salon failed to pay overtime when employees worked more than 40 hours in a workweek; failed to record all hours worked by employees; and failed to maintain other basic employment and payroll records as required by law. The second investigation found Hai Hua Beauty Salon Inc., at 151-91B Cross Island Parkway in Whitestone, also paid flat daily rates without regard to the number of hours actually worked; failed to pay overtime for hours worked beyond 40 in a week; and failed to keep accurate and complete payroll records.

Ada Nails & Spa paid $23,704 in overtime back wages to 12 employees while Hai Hua Beauty Salon Inc. paid $23,643 in overtime back wages to nine employees.

“The experience of these employers should serve as a lesson to all of New York City’s nail salon owners. This industry employs large numbers of vulnerable workers, many of whom may be unaware of their rights, may face language barriers, or may be reluctant to step forward to complain. We want nail salon employees to know their rights, and employers to know their responsibilities to prevent these violations from occurring,” said Debbie O. Lau, the Wage and Hour Division’s assistant district director in Manhattan. “We provide numerous tools to educate employers and employees in a variety of languages, including Chinese, Spanish, Korean, Thai, Vietnamese and Nepali. Our investigators are fluent in most of these languages and can obtain translations for others. Both workers and employers can speak with Wage and Hour representatives confidentially. All parties should also understand that we enforce the law regardless of a worker’s immigration status.”

Here are some of the basic protections required by the Fair Labor Standards Act:

Payment for Hours Worked:

• Workers must be paid for all the time they spend performing work, whether or not the employer approves the work in advance. This includes time spent in training, traveling from site to site during the day, and any work performed “off the clock.”

Minimum Wage and Deductions:

• Workers must be paid at least the federal minimum wage of $7.25 per hour for every hour that they work.
• Even if paid by the day or at a piece rate, the payment received, when divided by the number of hours actually worked, must equal at least the federal minimum wage for every hour worked.
• Some state laws require higher minimum wages and/or greater employee protections. Employers must comply with all laws that apply to their businesses.

Overtime Pay:

• Generally, workers must be paid 1½ times their regular rates of pay for every hour worked beyond 40 in a workweek.

Recordkeeping:

• Employers must keep accurate records of all their employees’ daily and weekly hours worked, and wages paid.
• Employees should keep their own records of their work hours and wages, and their employer’s name, address and phone number.

Independent Contractor or Employee?

Some salons incorrectly label workers “independent contractors” when they are actually employees. It is important for workers to know the difference between the two because employees are legally entitled to greater health and safety protections, wage protections and other benefits.

• Workers who are not sure whether they are employees or independent contractors should contact the Wage and Hour Division, who can provide information to help determine employees’ workplace rights.

It is illegal for an employer to fire workers or retaliate against them in any way for contacting the Wage and Hour Division or for exercising their workplace rights.

If workers believe their rights have been violated or have any questions, they can call the Wage and Hour Division at 1-866-487-9243 or in New York City at 212-264-8185 (Manhattan) or 718-254-9410 (Brooklyn). The division can assist in nearly any language, and its services are free and confidential.

• Read this news release en españól.
• Read this news release in Chinese.
• Read this news release in Korean.
• Read this news release in Nepali.