LOS ANGELES – While Southern California Sushi chefs worked up to 90 hours a week painstakingly assembling intricately crafted Godzilla rolls, sashimi assortments and other delicacies at various restaurants, the U.S. Department of Labor found their employer was cheating the chefs and other workers out of overtime pay, shaving hours off timecards and docking their pay routinely for 10-minute breaks.

Gatten Sushi, USA, Inc. and GTN Inc., based in Cerritos, have agreed to pay $232,293 in back wages and an equal amount in liquidated damages totaling $464,586 to 369 employees following an investigation by the department’s Wage and Hour Division. The investigation uncovered widespread violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act.  The employer has also paid $156,640 in civil penalties as a result.

“Unfortunately, the wage, overtime and record-keeping violations found at this employer’s establishments are all too common in the restaurant industry,” said Ruben Rosalez, the Wage and Hour Division’s regional administrator in San Francisco. “This employer’s failure to pay legally earned wages hurts the workers, their families and restaurant owners who play by the rules. This investigation and its outcome should send a strong message to others who may be cheating workers.

“The Wage and Hour Division encourages workers who are not paid the wages they legally earned, or not paid for all the hours they worked, to contact us,” Rosalez said. “Complaints are kept confidential, and the name of the person who filed and the nature of the complaint also remain confidential.”

Gatten operates owns sushi restaurants under Gatten Sushi name in Los Angeles (now closed), Cerritos, West Covina, Rowland Heights (now closed), Monterey Park, Irvine, Fullerton (now closed), Granada Hills and Gardena. GTN Inc., a sister company, owns and operates Yushoken Ramen restaurants in Arcadia and Irvine. The sushi and ramen restaurants were both part of the Labor Department investigation.

In addition to sushi chefs, servers and kitchen staff will also collect back wages as part of the settlement. Some of the sushi chefs reported having worked more than 90 hours per week without overtime.

The Fair Labor Standards Act, enforced by the Wage and Hour Division, 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 Wage and Hour 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.

ATLANTA – Hotel industry workers typically earn low wages and may struggle financially to meet basic needs. When employers fail to pay them the wages they have legally earned, their struggle gets even harder.

To ensure these employees receive the hard-earned wages, the U.S. Department of Labor’s Wage and Hour Division is conducting an ongoing education and enforcement initiative focusing on Georgia’s hotels and motels. The hotel industry often uses employment arrangements – such as subcontracting, franchising, and third-party management – that can obscure the worker-employer relationship, often at the expense of workers’ wages which may make violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act more likely. In fiscal years 2014 and 2015, the division’s Atlanta District Office completed more than 140 investigations in this sector, finding more than $283,000 in back wages due to more than 400 workers. The department also assessed more than $27,000 in civil money penalties against the employers for repeat or willful violations of the FLSA.

“This industry employs some of the most vulnerable workers we see,” said Eric Williams, director of the division’s Atlanta District Office. “Our initiative works to ensure that Georgia’s workers are protected against exploitation and that law-abiding hotel employers aren’t placed at a disadvantage for playing by the rules and paying fair wages. We will continue to use every tool at our disposal to make sure that happens.”

Pay practices commonly used by employers in this industry that can lead to violations of the FLSA are described in the department’s fact sheet on the hotel and motel industry.

In an education and enforcement initiative, the division reaches out to employers and industry stakeholders to offer compliance assistance and information on legal responsibilities. The division raises awareness among workers, community organizations and other stakeholders to inform them of federal wage and hour laws and protections and to encourage participation in promoting industry-wide compliance.

The misclassification of employees as independent contractors presents a serious problem for affected employees, employers and the entire economy. Misclassified employees often are denied access to critical benefits and protections – such as family and medical leave, overtime, minimum wage and unemployment insurance – to which they are entitled. Employee misclassification generates substantial losses to the U.S. Treasury and the Social Security and Medicare funds, as well as to state unemployment insurance and workers’ compensation funds. Misclassification also creates a competitive disadvantage for employers who comply with the law.

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. 

Employer: Chloe Apparel, Inc.

Site: 1143 East 29^th St., Los Angeles, California

Investigation findings: The employer paid straight time for overtime hours worked after 40 hours in a work week. The employer also failed to pay the proper minimum wage to a subset of workers. Both sets of violations fall under the Fair Labor Standards Act.

Resolution: The employer agreed to pay $164,255 to 142 employees for overtime violations, and an additional $9,488 to 42 employees for minimum wage violations.

Quote: “It is the obligation of all employers to accurately pay overtime wages at time-and-one-half after 40 hours in a week, regardless if the employee is paid on a piece-rate, day-rate, or on a salary basis,” said Skarleth Kozlo, assistant director for the Wage and Hour Division’s office in West Covina. “Given the garment industry’s poor compliance history – especially in Southern California – the Wage and Hour Division makes it a priority to investigate garment wage practices to verify compliance with federal laws.” 

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.

CHICAGO – A federal judge has ordered a Chicago limo company to pay 34 drivers $190,716 in back wages and an equal additional amount in liquidated damages, totaling $381,432, after finding the company violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

Investigators from the U.S. Department of Labor’s Wage and Hour Division found that Town & Country Limousine Inc. incorrectly categorized the drivers as exempt from overtime under the motor carrier exemption. While some drivers met the requirements for the exemption in some workweeks, most were legally entitled to time-and-a-half for hours worked beyond 40 in a workweek.

The investigation found that the company did not compensate drivers for time spent prepping and cleaning their vehicles, driving to and from the corporate garage and waiting for their customers to arrive. When these unpaid hours resulted in drivers working beyond 40 hours, overtime was legally due. The employer also failed to record and maintain legally mandated time and payroll records.

“This judgment is a win for these drivers who worked long hours without legally required overtime compensation. All employers are responsible for learning and complying with the regulations that apply to their businesses. Ignorance of the law is no excuse for violations,” said Tom Gauza, district director for the Wage and Hour Division in Chicago. “Other employers in this industry should take note of this investigation, and other workers who are being paid in this manner should give the Wage and Hour Division a call.  We are committed to ensuring that workers are paid every penny they have rightfully earned.”

The judgment resolves a lawsuit filed in March of 2015, and in addition to ordering the payment of back wages and damages, the judge permanently enjoined the company, John Jansen, the chief executive officer and William Lynch, the chief operating officer, from violating the FLSA in the future.

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

Civil Action Number: 15-cv-02010, Perez v. DT & C Global Management LLC d/b/a/ Town & Country Limousine, John Jansen, William Lynch

Employer: Humanage Acquisitions LLC, doing business as Riverbend Hand Car Wash

Site: 22290 La Palma Avenue, Yorba Linda, California 92887

Investigation findings: Investigators from the department’s Wage and Hour Division found that Riverbend Hand Car Wash failed to pay for all the hours employees worked, and failed to pay legally-required overtime when they worked beyond 40 hours in a work week, in violation of the Fair Labor Standards Act. The company required employees to arrive at the car wash at a certain time in the morning but did not allow them to clock in until a manager called them to clean and detail cars. This unpaid waiting time was not recorded or paid for and resulted in an overtime violation when employees worked more than forty hours in a week.  Even when recorded hours did exceed 40, the employer paid only straight time. Some employees were paid by check for the hours worked during the week and in cash for hours worked during weekends, all at straight time rates.  The car wash was also found in violation of FLSA’s recordkeeping requirements.

Resolution: The car wash agreed to comply with the FLSA and will pay $34,329 in overtime back wages plus an equal additional amount in liquidated damages, totaling $68,658 to 16 workers.

Quote: “Workers in this industry are among the most vulnerable that we see,” said Rodolfo Cortez, director of the Wage and Hour Division’s district office in San Diego. “Denying these workers their hard-earned wages can make it difficult for them to care for themselves and their families. This case should serve as an example to other employers who may be shorting their workers, and demonstrates our commitment to ensuring that workers are paid what they have legally earned.  Other employees who are being paid this way should give us a call.”

Information: 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. In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. 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). Information also is available at http://www.dol.gov/whd.

Employer name: Today’s Generation LLC, doing business as Jaws Shirts & Gifts

Investigation site: 3535 Parkway, Pigeon Forge, Tennessee

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Knoxville Area Office, found that Jaws Shirts & Gifts violated the overtime and record-keeping provisions of the Fair Labor Standards Act. Specifically, the employer paid workers straight time without regard to the number of hours they worked and failed to pay them time and a half when they worked over 40 hours in a workweek. The employer operates three locations and did not combine the hours employees worked at each location to determine the total hours worked. Some employees worked as many as 80 hours in a workweek at different locations and were paid straight time. Additionally, the employer did not keep legally required records of all hours worked by employees.

Resolution: Today’s Generation has agreed to comply with the FLSA, and pay 38 employees back wages and an equal amount in liquidated damages totaling $60,394.

Quote: “Employers cannot choose to pay employees less than what they are legally required because it is cheaper for them; they must comply with the law. Workers deserve to be paid fairly for the work they do,” said Nettie Lewis, the Wage and Hour Division’s district director in Nashville. “The Wage and Hour Division offers compliance assistance to help employers, because ignorance of the law is not an excuse. We strongly encourage workers who may be in similar situations, where their employer is not paying overtime after 40 hours of work in a workweek, to reach out to us.”  

Information: The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 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); or visit the Knoxville Area Office at 710 Locust St., Room 101, Knoxville, Tennessee 37902 or http://www.dol.gov/whd.

TULSA, Okla. – A federal judge in Tulsa overturned a jury verdict and ruled that El Tequila LLC and owner Carlos Aguirre willfully violated the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act. El Tequila and Aguirre must pay $2.1 million in back wages and liquidated damages to over 300 vulnerable workers.

The department’s case was so strong that before the trial the court, ruling on summary judgment, found that El Tequila and Aguirre had violated the FLSA’s minimum wage, overtime, and recordkeeping provisions. The court also granted the Secretary’s summary judgment motion with respect to his calculation of damages and the application of liquidated damages, and enjoined the employer from committing future violations of the FLSA. In the end, only one question was left for the jury: whether the defendants’ violations of the FLSA between Oct. 22, 2009 and Oct. 21, 2010, were willful. After a five-day trial, a jury found that El Tequila and Aguirre’s violations were not willful. The department filed a motion to set aside the verdict, arguing that the evidence presented at trial proved as a matter of law that El Tequila and Aguirre’s violations were willful. The judge agreed with the department. A ruling that the violations were willful means the statute of limitations to recover unpaid minimum wages, overtime compensation, and liquidated damages can be extended from two to three years.

“This ruling is a victory for the department, but more importantly for these hard-working and vulnerable employees. The employer willfully violated the FLSA and the judge’s decision means these workers will be able to collect more of the wages they rightfully earned,” said Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest. “This employer went to great lengths to avoid paying his employees wages they rightfully earned. Employers who violate the law should know: the department has been enforcing the Fair Labor Standards Act for more than 75 years and will continue to use all tools at its disposal, including the assessment of liquidated damages and, when necessary, litigation, to ensure that workers are properly paid.”

In his Dec. 22, 2015 order, U.S. District Judge John Dowdell of the Northern District of Oklahoma determined that the jury’s verdict, clearing the employer of willful violations, was not supported legally. At trial, the department showed undeniably that El Tequila and Aguirre underpaid employees willfully; lied to a federal investigator, instructed employees to do the same; falsified payroll and time records; accepted kickbacks; and used an accountant to cover up their wage theft violations.

El Tequila operates four Mexican restaurants in the Tulsa area.

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, and are prohibited from retaliating against workers who exercise their rights under the law. 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/.

Docket Number: 12-CV-588-JED-PJC

Employer name: Elk Springs Resort Cabin Rentals LLC  

Investigation site: 1088 Powdermill Road, Gatlinburg, Tennessee

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Knoxville Area Office, found that Elk Springs violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. The employer misclassified employees working as cabin cleaners, customer service representatives, cabin inspectors, laundry workers, maintenance workers and an operations manager as independent contractors, and failed to pay at least the federal minimum wage of $7.25 per hour and overtime compensation at time-and-one-half employees’ regular rates for hours worked beyond 40 in a work week.

Resolution: Elk Springs has agreed to comply with the FLSA, and will pay back wages of $55,586 to 33 employees.

Quote: “Misclassified employees often are denied access to critical benefits and protections to which they are entitled, such as the minimum wage, overtime compensation, family and medical leave, unemployment insurance and safe workplaces,” said Nettie Lewis, the Wage and Hour Division’s district director in Nashville. “Employee misclassification generates substantial losses for federal and state governments in the form of lower tax revenues, as well as to state unemployment insurance and workers’ compensation funds. It hurts taxpayers and undermines the economy.”

Information: More information regarding the Department of Labor’s initiative to combat the misclassification of employees can be found at http://www.dol.gov/whd/workers/Misclassification/index.htm The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 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 Nashville District Office at 615-781-5344 or visit http://www.dol.gov/whd.

Employers: St. James Home for the Elderly, Inc.

Sites:  

• St Elizabeth Home for the Elderly, 257 North Stephora Street, Covina, CA 91724
• St Elizabeth Home for the Elderly II, 837 North Sunflower Avenue, Covina, CA  91724
• St Therese Home for the Elderly, 1301 North Birchnell Avenue, San Dimas CA  91773
• St Anthony’s Home for the Elderly, 1312 East Mountain View Avenue, Glendora, CA 91740
• St James Home for the Elderly, 1042 Claraday Street, Glendora, CA  91740
• St John’s Home for the Elderly, 167 Sutter Court, San Dimas, CA  91773
• St Michael’s Home for the Elderly, 1506 South Candish Avenue, Glendora, CA  91740

Investigation findings: Investigators from the U.S. Labor Department’s Wage and Hour Division found that St James Home for the Elderly violated the overtime and recordkeeping provisions of the Fair Labor Standards Act. The firm paid the employees only for their scheduled hours, and failed to pay for any time spent caring for patients or performing other work-related duties before or after their scheduled shifts.  Failing to pay for this time resulted in employees not receiving their legally-required overtime when they worked more than forty hours in a workweek. The firm also failed to keep an accurate record of hours worked.

Resolution: The employer will pay $103,724 to 40 employees for the overtime violations.

Quote: “We must ensure that workers in this industry, who are caring for our loved ones, are paid for all the hours that they work,” said Skarleth Kozlo, assistant district director for the Wage and Hour Division office in West Covina.  “Other employers in this industry should take note of this investigation, and other workers who are being paid in this manner should give the Wage and Hour Division a call.  We are committed to ensuring 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 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. In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. 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, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd.

RALEIGH, N.C. – Investigations by the U.S. Department of Labor’s Wage and Hour Division have found violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act at 10 San Jose Mexican Restaurant locations throughout the state. As a result, the restaurants will pay a total of $511,745 in back wages to 125 employees. The division’s Raleigh District Office led the initiative.

Violations found include:

• Paying workers a fixed salary without regard to the number of hours they actually worked, which allowed the employer to pay workers less than the federal minimum wage for every hour worked.
• Failing to pay workers overtime when they worked beyond 40 hours in a workweek.
• Requiring wait staff to work only for tips, resulting in minimum wage and overtimes violations.
• Reducing workers’ pay below minimum wage by charging employees for mandatory uniforms.
• Failing to maintain required time and payroll records, and falsifying payroll documents.

“The restaurant industry employs some of our country’s lowest-paid workers, who are often vulnerable to disparate treatment and wage violations. Failure to pay these workers the wages they have worked long hours to earn hurts them and their families, and it provides a competitive advantage over law-abiding employers. Enforcement actions like these should motivate all North Carolina restaurant owners to follow the law and provide a fair day’s pay for a fair day’s work to all employees,” said Richard Blaylock, the Wage and Hour Division’s Raleigh district director.

The San Jose Mexican Restaurants involved in the investigation are:

• San Jose Mexican Restaurant Elizabethtown Inc., 1320 Broad St., Elizabethtown
• San Jose Mexican Restaurant of Lumberton Inc., 3027 North Roberts Ave., Lumberton
• San Jose Mexican Restaurant No. 2 of Lumberton Inc., 5039 Fayetteville Road, Lumberton
• San Jose Mexican Restaurant of Pembroke Inc., 938-B East 3^rd St., Pembroke
• San Jose of Roanoke Rapids Inc., 309 Premier Blvd., Roanoke Rapids
• San Jose Flores Inc., 1565-67 Benvenue Road, Rocky Mount
• San Jose Restaurant Inc., 1700 Raleigh Road Parkway, Suite 120, Wilson
• San Jose of Zebulon Inc., 877 E. Gannon Road, Zebulon
• Flores Restaurant Inc., 1616 S. Madison St., Suite A, Whiteville
• San Jose Mexican Restaurant of Raleigh Inc., 5811 Poyner Village Parkway, Raleigh

In addition to paying back wages, the restaurant owners have agreed to comply with the FLSA.

The FLSA requires the payment of at least the federal minimum wage of $7.25 per hour to covered, nonexempt employees for all hours worked. It also requires that employees receive time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

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 dishwashers, cooks, chefs and janitors. Finally, paycheck deductions for 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 Raleigh District Office at 919-790-2742 or visit http://www.dol.gov/whd.