Employer name: Apollo Industries Inc.

Investigation site: 1850 South Cobb Industrial Blvd., Smyrna, Georgia 30082

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division’s Atlanta District office found the employer violated overtime, minimum wage and recordkeeping provisions of the Fair Labor Standards Act. Apollo Industries is a specialty chemical contract packager.

On Feb. 9, 2016, the department filed a complaint in U.S. District Court for the Northern District of Georgia, Atlanta Division, alleging Apollo and plant supervisor Carlos Conde failed to pay its employees the minimum wage, currently $7.25 per hour, and legally required overtime. The company also failed to maintain accurate records of all hours worked by its employees.

The overtime violations resulted when the employer paid workers straight time for hours worked beyond 40 in a workweek, instead of time and a half their hourly rates of pay. Minimum wage violations occurred when the employer failed to pay workers for some hours they had worked, and did not compensate them at least $7.25 per hour.

Resolution: The lawsuit seeks to recover unpaid minimum wages and overtime compensation for at least 192 employees, beginning Feb. 10, 2012, and an equal amount in liquidated damages. The suit also seeks to permanently enjoin the defendants, their officers or agents from violating provisions of the FLSA in the future. 

Quote: “Denying these workers the wages they rightfully earned harms employees and their families and makes it harder for law-abiding employers to compete,” said Eric Williams, director of the division’s Atlanta District Office. “This case demonstrates that the agency will use every enforcement tool available, including litigation, to ensure a fair day’s pay for a fair day’s work.”

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records and to comply with the hours worked requirements. 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 Atlanta District Office at 678-237-0521, or visit http://www.dol.gov/whd/.

KALAMAZOO, Mich. – Imagine having to pay your restaurant employer to be able to work there.

That’s what U.S. Department of Labor’s Wage and Hour Division investigators found at two popular Sophia’s House of Pancakes restaurants in Kalamazoo and Benton Harbor where servers were required to pay $2 an hour from their tips to their employer. Investigators also found that Peter Philis, who runs the Benton Harbor location, discriminated against a server, claiming that she reported violations of the Fair Labor Standards Act to the Labor Department.

A federal judge ordered the restaurants, Sophia’s LLC in Kalamazoo and Sophia’s III in Benton Harbor, and their owners, John P. Filis and Peter P. Philis, to pay $122,500 in back wages and $122,500 in liquidated damages to 73 employees at the Kalamazoo location and 45 workers at the Benton Harbor restaurant.

“Requiring employees to hand over part of their tips to their employer poses a serious problem to workers who, in many cases, are already struggling to get by, and also undercuts those employers that obey the law and pay their workers properly,” said Mary O’Rourke, district director for the Wage and Hour division in Grand Rapids. “Tips are the property of the workers, and must be retained by them except where a valid tip-pooling arrangement is in place that includes only tipped workers. We see far too many violations of this nature in the restaurant industry, where low-wage workers are particularly vulnerable to unfair labor practices. Often, their employers take advantage of them. The terms of this consent judgment should serve as a wake-up call to other restaurants attempting to short workers in this manner.” 

Investigators found the restaurants failed to comply with the FLSA’s requirements for tipped employees as well as the minimum wage, overtime, record keeping and anti-retaliation provisions by:

• Requiring servers to pay the employer $2 per hour from their tips, without a tip pooling arrangement in place. A valid tip pool allows employers to collect tips as long as employees are notified of the arrangement and tips are redistributed by the employer to eligible employees in the pool and not used for any other purpose.
• Failing to pay servers for time spent working before and after their scheduled shifts.
• Taking deductions from employees’ pay for uniforms or incorrect orders, causing their hourly rates to fall below minimum wage.
• Failing to accurately record daily and weekly work hours and earnings.
• Paying kitchen staff flat salaries without regard to the number of  hours they worked, resulting in violations of the overtime regulations when these employees worked over 40 hours in a workweek and were not paid overtime.
• Discriminating against a worker whom the employers blamed for calling the Department of Labor to complain about the restaurant’s pay practices

The court action enjoins the defendants from violating the FLSA in the future and requires significant changes in their business practices.  The defendants are required to provide training to managers and employees on the FLSA’s tip credit provisions to ensure compliance with the FLSA at both locations.

The consent judgment also requires the employer to:

• Install a computer or point-of-service system that records hours worked and permits servers to self-report tips received;
• Provide every current and future employee with a Wage and Hour division “Work Hours Record keeper” publication they can use to track their hours;
• Provide a complete wage statement to each employee each pay period, showing all hours worked, rate of pay, gross pay received, the nature and amount of all deductions,  net pay, the pay period covered by the payment, and a copy of the employee's record of hours worked.

It also requires the employers to provide a copy of the Wage Hour Division’s Handy Reference Guide to the Fair Labor Standards Act, to every current and future employee.

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 pay a tipped employee only $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 at least the federal minimum wage of $7.25 per hour the employer must make up the difference. Tips are the property of the employee who receives them.

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).

# # #

Perez v. Sophia’s of Kalamazoo LLC, Sophia’s III Inc., John P. Filis and Peter P. Philis
Civil Action Number: 1:14-cv-00772-RHB

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ST. MICHAEL, Minn. – A central Minnesota sheet metal fabricator has paid $85,617 in back wages and an additional equal amount in liquidated damages totaling $171,234 to 43 workers. The U.S. Department of Labor’s Wage and Hour Division determined the company violated the overtime provisions of Fair Labor Standards Act by “banking” overtime hours instead of paying for that time at legally-required time and a half.

Agency investigators found Progressive Building Systems Ltd. “banked” employees’ hours when they worked more than 40 in a workweek, paying them out in future, shorter work weeks at straight time. The FLSA requires employers to pay overtime at not less than one and one-half times workers’ regular rates of pay for any hours they work beyond 40 in a workweek. Progressive also failed to maintain accurate records of hours worked, the division found.

“Banking hours in lieu of paying overtime is an all too common practice,” said David King, district director for the Wage and Hour Division in Minneapolis. “Denying these workers the wages they rightfully earned makes it more difficult for them to support their families, and puts employers who play by the rules at a competitive disadvantage.  Other employers who may be paying workers in this manner should take note, and rectify their practices. Other workers whose overtime hours are banked should give us a call. All calls to our offices are free and confidential.”

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in federal, state, and local governments. Covered, nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour. Overtime pay, at a rate not less than one and one-half times the regular rate of pay, is required after 40 hours in a workweek.

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

Employer: MGM Resorts International, doing business as “The Mirage”

Site: 3400 Las Vegas Blvd. South, Las Vegas, Nevada

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division in Las Vegas found that The Mirage, a hotel and casino resort, wrongfully terminated the employment of a banquet server based on his use of medical leave, which is protected under the Family and Medical Leave Act. While the employer reinstated the worker one year after the termination, the Mirage failed to pay him back wages for the time he would have worked, and failed to restore his pension hours and health benefits on a timely basis – all of which the law requires.  

Resolution: The Mirage agreed with the division’s finding and paid the employee $74,546 in back wages and fully restored his seniority, pension and health benefits.

Quote: “The Family and Medical Leave Act protects eligible workers from having to choose between work and family care or personal medical leave needs. The loss of a year’s pay was a tremendous hardship for this worker,”said Gaspar Montanez, district director for the Wage and Hour Division in Las Vegas. “The U.S. Department of Labor’s Wage and Hour Division is committed to protecting workers’ FMLA rights and educating both employers and employees about their rights and responsibilities under this law.”

Information: Under the FMLA, an employer cannot interfere with, restrain or deny the exercise of – or the attempt to exercise – any FMLA right by the employee. Companies may not discriminate or retaliate against an employee or prospective employee for having exercised or attempted to exercise any FMLA right. Specifically, an employer may not use an employee’s request for or use of FMLA leave as a negative factor in employment actions, such as hiring, promotions or disciplinary procedures.   

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), or the Las Vegas office at 702-388-6001. Information is also available at http://www.dol.gov/whd/.

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HORTONVILLE, Wis. – A Wisconsin industrial cleaning contractor failed to pay workers for all their time spent loading trucks and driving to job sites, resulting in violations of the minimum wage and overtime provisions of the Fair Labor Standards Act.  Following an investigation by the U.S. Department of Labor’s Wage and Hour Division, Mid Valley Industrial Services Inc. will pay a total of $104,421 in back wages to 56 workers.

Investigators found minimum wage and overtime violations occurred when employees were not compensated for time spent reporting to the employer’s shop, loading trucks and driving to job sites. Additionally, at least one salaried employee was erroneously classified as exempt from overtime. The company also failed to maintain accurate records of hours worked by employees.

“Workers must be paid for all the hours they work, including time spent traveling between job sites,” said David King, district director for the Wage and Hour Division in Minneapolis. “Denying these workers their hard-earned wages provided an economic advantage to this employer on the backs of these workers.  Other employers who may be committing this same violation should take note, and rectify their practices.  Other workers whose hours are being shorted should give our office a call.  All calls to our offices are free and confidential.”

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in federal, state, and local governments. Covered, nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour. Overtime pay, at a rate not less than one and one-half times the regular rate of pay, is required after 40 hours in a workweek.  For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at www.dol.gov/whd/.

Employers: HSC Hilo LLC, doing business as Hawaiian Style Café Hilo; and Bajcka LLC, doing business as Hawaiian Style Café Waimea

Sites: 681 Manono St #101, Hilo, HI; and 65-1290 Kawaihae Road, Kamuela, HI   

Investigation findings: Investigators from U.S. Department of Labor’s Wage and Hour Division found that the restaurants failed to pay workers the legally required overtime rates of pay for hours worked beyond 40 in a workweek, in violation of the Fair Labor Standards Act. Specifically, the owners paid any hours in excess of 40 in cash at the employee’s straight time rates, failing to pay all those overtime hours worked at time-and-a-half their regular rates of pay.

Resolution: The restaurants were jointly owned and operated during the period of investigation. Hawaiian Style Café Hilo will pay $21,798 in unpaid overtime wages plus an equal amount in liquidated damages, totaling $43,596 to 41 employees. Hawaiian Style Café Waimea will pay $5,200 in unpaid overtime wages plus an equal amount in damages, totaling $10,400 to four employees.

Quote: “Employers who deny low-wage workers their legally required overtime earnings diminish the ability of those workers to care for themselves and their families,” said Terence Trotter, director of the division’s Honolulu District Office. “Employers that circumvent the wage provisions of the Fair Labor Standards Act also unlawfully obtain an economic advantage when competing with other businesses that properly record and pay their workers. As the back wages and damages collected in this case demonstrate, we are serious about putting a stop to these violations. Other workers being paid in this manner should give us a call.”  

Information: The FLSA requires that covered, nonexempt employees be paid time-and-one-half their regular rates of pay for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.

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), or the Honolulu office at 808-541-1361. Information also is available at http://www.dol.gov/whd/.

WASHINGTON — Officials of the U.S. Department of Labor's Wage and Hour Division, the New York State Labor Department and the New York State Attorney General Eric T. Schneiderman's Office today signed memoranda of understanding to protect the rights of employees by preventing their misclassification as independent contractors or other nonemployee statuses.

The memoranda of understanding represent a new effort on the part of the three agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification. The New York State Labor Department and New York State Attorney General's Office are the latest state agencies to partner with the Labor Department. In the last two years, the Wage Hour Division has secured over $18.2 million in back wages for more than 19,000 workers where the primary reason for minimum wage or overtime violations under the Fair Labor Standards Act was that workers were not treated or classified as employees. This represents a 97 percent increase in back wages following the implementation of these agreements.

"Working with the states is an important tool in ending misclassification," said M. Patricia Smith, U.S. Solicitor of Labor. "These collaborations allow us to better coordinate and ensure compliance with both federal and state laws alike."

"Misclassification deprives workers of rightfully-earned wages and undercuts law-abiding businesses," said Laura Fortman, the principal deputy administrator of the Wage and Hour Division. "These memoranda of understanding send a clear message that we are standing together with the State of New York to protect workers and responsible employers and ensure everyone has the opportunity to succeed."

"When employers misclassify employees as independent contractors for their own gain, they hurt their employees and they even hurt other businesses — the law-abiding employers who don't steal from their employees," said New York State Labor Commissioner Peter Rivera. "I'm proud of this partnership we're beginning here today to root out bad actors and bring them to justice."

"This partnership with the U.S. Department of Labor will help New York continue our work of aggressively enforcing the labor laws and ensuring a level playing field for employers who play by the rules. Sharing information and cooperating in investigations will help protect the rights of New York's workforce, and will lead to more effective enforcement and greater compliance by employers," said Terri Gerstein, Labor Bureau Chief for New York Attorney General Eric T. Schneiderman. The New York State Attorney General's office brings select cases to enforce the state's labor laws, including both civil and criminal cases. For more information, please visit the Labor Bureau's website at: http://www.ag.ny.gov/bureau/labor-bureau/.

Business models that attempt to change or obscure the employment relationship through the use of independent contractors are not inherently illegal, but they may not be used to evade compliance with federal labor law. Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem, as these employees often are denied access to critical benefits and protections–such as family and medical leave, overtime compensation, minimum wage pay and Unemployment Insurance–to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.

Memoranda of understanding with state government agencies arose as part of the department's Misclassification Initiative, with the goal of preventing, detecting and remedying employee misclassification. California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington have signed similar agreements. More information is available on the Department of Labor's misclassification website at http://www.dol.gov/misclassification/.

The mission of the department is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and ensure work-related benefits and rights. To learn more about the FLSA's requirements, call the Wage and Hour Division's toll-free hotline at 866-4US-WAGE (487-9243) or visit its website at http://www.dol.gov/whd/.

Employer: C&C Security Inc., doing business as Cast and Crew Security

Site: 438 Hobron Lane #117, Honolulu, HI 96815

Investigation findings: Investigators from U.S. Department of Labor’s Wage and Hour Division found that C&C Security failed to pay security guards for television and film productions such as “Predator,” “Soul Surfer,” “Hawaii Five-0” and “The Descendants” legally required overtime in violation of the Fair Labor Standards Act. Specifically, the firm did not pay their guards time-and-a-half their regular rates of pay for all of their hours worked in excess of 40 in a workweek. The employer also paid a number of guards on a salary basis and incorrectly considered them “exempt” from overtime requirements.

Resolution: Under the terms of a consent judgment filed with the U.S. District Court for the District of Hawaii, C&C Security Inc., its president Richard A. Groder Jr., and manager Kelii C. Correa will pay $57,785 in unpaid overtime wages plus an additional and equal amount in liquidated damage, totaling  $115,570 to 65 employees.

Quote: “Violations are particularly troublesome in situations like this, where low wage workers are denied access to all of their lawfully entitled earnings which must cover the essential expenses of living in Hawaii,” said Terence Trotter, director of the division’s Honolulu District Office. “Just as there are standards for quality in the production of movies and television shows, there are also baseline wage standards for contracted workers who provide protective services at set locations.”

Information: Simply paying an employee a salary does not necessarily mean the employee is not eligible for overtime.  The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations.  On June 30, 2015, the Wage and Hour Division announced a Notice of Proposed Rulemaking to update the regulations defining which white collar workers are eligible to receive pay for hours worked over 40 in a workweek. For more information, please visit www.dol.gov/whd/overtime/NPRM2015.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.  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), or the Honolulu office at 808-541-1361. Information also is available at http://www.dol.gov/whd.

Employers: Alfonso’s Carniceria, Inc., doing business as Alfonso’s Meat Market

Site: 2756 Whitson St., Selma, California

Investigation findings:  Instead of paying overtime at time-and-a-half workers’ regular rates of pay, as the law requires, the employer paid for overtime hours at straight-time rates, in cash, off the books, in violation of the Fair Labor Standards Act. The employer also failed to pay cashiers, prep cooks and the butcher’s assistant for all the hours that they worked. In addition, the company paid two butchers flat salaries, without regard to how many hours they worked. This resulted in the employer failing to pay these workers overtime for hours they worked beyond 40 in a week. The firm also failed to maintain records required by the FLSA.

Resolution: The market owner will pay $74,862 in back wages and an equal additional amount in liquidated damages totaling $149,724 to eight employees.

Quote: “Thanks to this investigation, these eight workers will finally receive the wages they worked long hours to earn,” said Rick Newton, director of the U.S. Department of Labor’s Wage and Hour Division in Sacramento. “We continue our focus on industries where these types of violations are common, and where vulnerable workers may be unlikely to step forward to complain. The settlement reached in this case demonstrates how costly non-compliance can be for an employer, and sends a strong message to other employers who may be paying workers in this manner.”

Information: 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/.

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/.

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LOS ANGELES – The U.S. Department of Labor’s Wage and Hour Division has launched an education and enforcement initiative on the West Coast and in surrounding areas aimed at ensuring workers at fast food establishments are being paid the proper minimum wage and overtime.

Investigations completed in the last five quarters nationwide have resulted in fast food employers paying more than $6.7 million in back wages owed to nearly 18,000 employees.

Investigators will continue to look at establishments in California, Oregon and Washington, ensuring compliance with the Fair Labor Standards Act’s wage and recordkeeping practices. In addition to conducting investigations, Wage and Hour officials are organizing roundtable meetings with local industry stakeholders, holding training sessions with groups of restaurant franchise owners on FLSA compliance, and meeting one-on-one with various franchisors. The fast food industry widely uses the franchise ownership model in its operations. 

“The men and women cooking and serving our burgers and fries are some of the hardest working people in our communities, often juggling long shifts and multiple jobs for comparatively low wages. We want to make sure they’re being paid every penny they rightfully earn,” said Wage and Hour Regional Administrator Ruben Rosalez. “Unfortunately, we still find business owners willing to cut corners at workers’ expense. This initiative will ensure that these workers are paid their hard-earned wages. It will also help to level the playing field so that the many upstanding restaurant owners who play by the rules do not find themselves at a competitive disadvantage to those who do not. ”

Investigators will continue to look for common the fast food restaurant industry violations, including:

• Failure to pay workers for all hours worked, typically time spent either before or after a scheduled shift.
• Deductions from pay that result in minimum wage  and overtime violations.
• Unlawfully categorizing some salaried workers as exempt from overtime.
• Requiring minors to work in jobs or at times prohibited by child labor laws.
• Misclassifying  delivery drivers as independent contractors, instead of employees, and as a result denying them minimum wage and overtime.

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.

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/.

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