WASHINGTON – The U.S. Department of Labor and the IRS today renewed a memorandum of understanding and added a streamlined process for joint referrals and closer coordination to stop businesses from misclassifying workers and denying them their full wages, benefits and protections under the law.

The updated MOU will also help the department’s Wage and Hour Division share information and work in concert with the IRS to strengthen enforcement of federal and state laws that protect workers’ rights. 

“We are determined to identify and resolve labor violations by employers who benefit by misclassifying employees as independent contractors and deprive them of the protections of the labor standards laws we enforce,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “Renewing our memorandum of understanding with the IRS strengthens our existing partnership by improving referral processes and information sharing to help us better serve the nation’s workers.” 

In 2011, the Wage and Hour division and the IRS first entered into a memorandum of understanding to enable both agencies to use their resources to promote employer compliance with obligations to pay employees and related employment taxes. Since then, the division and IRS have shared information when an investigation discovered that an employer had misclassified employees. By sharing information, the agencies reduce the illegal use of misclassification and the tax gap while improving compliance with federal labor laws. 

Learn more about the Wage and Hour Division, including misclassification of independent contractors and a search tool for workers to use if they think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions – regardless of where they are from – and the department can speak with callers in more than 200 languages.

SIOUX FALLS, SD – The U.S. Department of Labor has recovered $279,070 in back wages and liquidated damages from a Sioux Falls buffet restaurant that paid kitchen workers a flat monthly salary and denied them overtime wages for hours over 40 in a workweek.

An investigation by the department’s Wage and Hour Division found Hibachi Grill & Supreme Buffet – operated by H & G Inc. – failed to pay 31 workers overtime wages when required, did not keep accurate records of hours worked or employees’ full names and addresses, and failed to post the required poster, all violations Fair Labor Standards Act.

“H & G Inc. denied 31 kitchen workers their full wages and hurt these workers and their families by making it more difficult for them to make ends meet,” explained Wage and Hour District Director Chad Frasier in Denver. “The Wage and Hour Division knows violations like these are all too common in the restaurant industry, and we leverage resources – such as working cooperatively with advocacy groups – to bring employers into compliance and ensure workers’ rights and benefits are protected under the law.”

In addition to paying back wages, H & G agreed to conduct internal bi-annual compliance audits and to provide ongoing training on federal wage laws to managers and workers.

In fiscal year 2021, the Wage and Hour Division recovered more than $34.7 million for more than 29,000 food service workers, in an industry ranked first among the division’s “low wage, high violation” employers.

Bureau of Labor Statistics’ data projects more than 1.4 million job openings in the accommodation and food services industry and about 883,000 workers quit their jobs in September 2022. In this environment, employers must be highly competitive to keep and attract workers.  

The department’s Quick Service Restaurants Compliance Assistance Toolkit explains wage laws for the industry.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for android devices to ensure hours and pay are accurate.

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OKLAHOMA CITY, OK – The U.S. Department of Labor has recovered $59,049 in back wages and liquidated damages for 10 workers whose Oklahoma restaurant employer ignored overtime and minimum wage regulations, illegally kept a portion of workers’ tips and allowed minors to work more hours per week than permitted and at times not allowed by the federal child labor laws.

An investigation by the department’s Wage and Hour Division found Eliseo Enterprises LLC, operator of Chile Verde Mexican Grill, paid employees varying amounts of pay without regard to actual hours worked and failed to pay overtime when due. Investigators also learned the employer withheld some tips from the employee tip pool and used them to pay regular wages at the operator’s discretion. Withholding tips from tipped employees led to violations of federal minimum wage regulations. Investigators also found the Oklahoma City restaurant operator did not keep proper time and pay records as required by law.

“Plain and simple, tips are the property of the workers who earn them, and employers cannot withhold tips given to tipped employees regardless of whether or not the employer takes a tip credit,” explained Wage and Hour Division District Director Michael Speer in Oklahoma City. “Many workers in the food service industry and their families depend on being paid all their rightfully earned wages and benefits, and being shortchanged harms them. The Wage and Hour Division offers assistance – in person, by phone and online – when employers disregard the law, they will be held to account.”

In addition to wage violations, the division determined Eliseo Enterprises permitted two of three 15-year-old employees to work between 22 and 27 hours per week and up to 39 hours in some instances. All three minors worked more than 8 hours per day or past 7 p.m. on school nights.[AW1]  Investigators also found the minors worked 8 to 10 hours a day and as late as 10 p.m. on school nights to close the restaurant.[VW2]  These practices violate the child labor provisions of the Fair Labor Standards Act.

In fiscal year 2021, the division identified nearly $35 million in back wages owed to more than 29,000 food service industry workers. In its food service investigations, the division commonly finds violations related to employers retaining tips, failing to pay overtime when required and not paying for pre- and post-shift work.

The Bureau of Labor Statistics projects employment in food preparation and service occupations will grow 20 percent from 2020 to 2030, much faster than the average for all occupations, and gain about 2.3 million jobs. These occupations are among the nation’s lowest paid groups. Employers who ensure their workers are paid their rightful wages and benefits will be best positioned to retain and recruit skilled workers.

Learn more about the Wage and Hour Division, regulations for the food service industry, and a search tool to use if you think you may be owed back wages. Workers can call the Wage and Hour Division regardless of where they are from, it is free, confidential and the department can speak with callers in more than 200 languages.

Download the agency’s new Timesheet App for iOS and Android devices to ensure hours and pay are accurate.

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Employer name:                    Universal HomeCare Service LLC                                             

Investigation site:                  213 Washington Ave.

                                                           Mansfield, LA 71052

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found Universal HomeCare Service failed to pay 34 direct services workers overtime rates for hours over 40 in a workweek. The employer paid straight time when overtime pay was owed, a violation of the Fair Labor Standards Act.

Back wages recovered:         $20,318 in overtime back wages

                                                $20,318 in liquidated damages

Quote: “Home healthcare workers who provide care and companionship services often work long hours. They deserve to be paid every cent the law requires,“ said Wage and Hour District Director Troy Mouton in New Orleans. “Employers with questions about their obligations should contact us for free guidance that could help them avoid investigation and paying a significant amount of back wage and potential damages.”

Learn more about Wage and Hour Division.

Employer name:                    Oak Texas Bar & Grill LLC

                                                        Oak Texas Bar LLC

Investigation site:                 7001 N. 10th St., Suite C, McAllen, Texas 78504

                                                         113 S 17th St., McAllen, TX 78501

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found the employer violated federal minimum wage obligations by not paying servers and bartenders a cash wage of at least $2.13 per hour. The restaurant allowed employees to work for tips only, which failed to meet the federal minimum wage requirements. Investigators also found that the employer failed to pay overtime pay to wait staff. In addition, the investigation determined the employer paid cooks straight time for all hours worked.

Back wages recovered:         $250,599 in owed back wages and liquidated damages

Workers affected:                     36

Quote: “By law, employers who claim a tip credit must make sure their employees earn at least the federal minimum wage, and that all hours – including hours worked at a different location – be counted when calculating overtime pay,” explained Wage and Hour District Director Cindy Cantu Flores in McAllen, Texas. “Low wage workers depend on every dollar they earn to make ends meet, and employers must pay them full wages or face the costly consequences of violations.”

Employer:                                          Justar Fashion Inc.

Investigation sites:                            2660 Chico Ave.

South El Monte, CA 91733

Investigation findings:                      U.S. Department of Labor Wage and Hour Division investigators found Justar Fashion – a garment contractor that produces apparel for retailers such as Stitch Fix, Indigo and Evereve – failed to pay minimum wage and overtime as required by paying workers on a piece-rate basis and at straight-time rates regardless of the overtime hours they worked. The employer also failed to keep records of hours worked. Their actions violated minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act.

Back Wages/Damages Recovered:  $145,290 in back wages for 32 employees

Quote: “The U.S. Department of Labor is committed to making sure garment industry workers receive all of the wages they have earned, including overtime,” said Wage and Hour Division Assistant District Director Rafael Valles in West Covina, California. “Federal law protects all workers in the U.S. – regardless of where they come from – and we urge them to contact the Wage and Hour Division with any questions related to their wages and hours worked.”

Background:  Learn more about the Wage and Hour Division, and its search tool if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App, now available for Android and iOS devices, to ensure hours and pay are accurate.

Employer:                           CHU Contracting Inc.                                                                                                                                                                                                                              14020 Thunderbolt Place, Suite 300                                                                                                                                                                                                Chantilly, Virginia 20151

Investigation site:          Potomac Yard Metro Station                                                                                                                                                                                                               2601 Main Line Blvd.                                                                                                                                                                                                                               Alexandria, Virginia 22301

Investigation findings: Investigators with the U.S. Department of Labor’s Wage and Hour Division found that the commercial roofing contractor classified employees as laborers and roofers incorrectly while they performed sheet metal work on a federally funded project. By doing so, the employer failed to pay the proper prevailing wage, holiday and overtime pay rates, which are violations of the Davis-Bacon and Related Acts. 

Back wages recovered:         $288,341 in back wages for eight workers.

Quote: “Employers cannot improperly classify employees and deny them required pay and fringe benefits,” said Wage and Hour Division District Director Nicholas Fiorello in Baltimore. “Contractors should take time to review worker classifications and wage determinations due to the variances in hourly rates on federal projects. We encourage employers to ask questions if they are uncertain to avoid costly violations.”

Background:  Learn more about the DBRA, the CWHSSA and other laws enforced by the division including a search tool if you think you may be owed back wages collected by the division. The department can speak with callers confidentially in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Download the agency’s new Timesheet App, now available for android devices, to ensure hours and pay are accurate.

Learn more about Wage and Hour Division.

SEATTLE – While 77 care workers employed by Seattle-area adult family home providers worked long hours to ensure the well-being and daily needs of older adults and people with disabilities, a federal investigation has found their employers were shortchanging them $530,418 in wages.

Part of an ongoing compliance initiative by the U.S. Department of Labor’s Wage and Hour Division, the investigations determined that Elena’s Home Care, Nashville Adult Family Home, Kirsten Adult Family Home, Woodhaven Adult Family Home, Goldenville Adult Family Home and AssureCare Adult Home LLC paid workers daily flat rates regardless of the number of hours they worked. By doing so, the employers paid some employees less than the federal minimum wage and denied overtime wages to those who worked more than 40 hours in a workweek. Their failures violate the Fair Labor Standards Act.

In total, the division’s investigations recovered $1,060,836 in back wages and liquidated damages for the affected workers and assessed $30,038 in civil money penalties.

Specifically, the division reached administrative settlements after finding the following:

• Elena’s Home Care, Nashville Adult Family Home, Kirsten Adult Family Home, Woodhaven Adult Family Home and Goldenville Adult Family Home failed to pay required overtime and did not keep required records. The division recovered $737,392 in back wages and liquidated damages for 43 employees and assessed $19,742 in penalties.  
• AssureCare Adult Home LLC, based in Lakewood, and owner Marcelina Macandog failed to pay the required overtime rate for hours over 40 in a workweek. They also incurred recordkeeping violations by failing to maintain a record of hours worked and by not calculating wages on a workweek basis. The division recovered $323,444 in back wages and liquidated damages for 34 employees at eight Washington locations and assessed $10,296 in civil penalties for the willful nature of the violations. In 2018, the division recovered $110,000 in back wages after a previous investigation of AssureCare.

“Care workers in these adult family homes provided a lifeline to their clients but their employers failed respect the dignity of their employees by paying them all of their hard-earned wages,” said Wage and Hour Division District Director Thomas Silva in Seattle. “AssureCare, Elena Home Care, Nashville Adult Family Home, Kirsten Adult Family Home, Woodhaven Adult Family Home, and Goldenville Adult Family Home ignored federal laws that protect workers’ wages and benefits, and deliberately made it more difficult for their employees to care for themselves and their families.”

“Since 2021, we’ve found violations in 80 percent of the more than 1,600 investigations we’ve completed in the care industry. These probes have recovered more than $28.6 million in back wages and damages for 25,000 workers, and led to nearly $1.3 million in penalties for employers,” Silva said. “The U.S. Department of Labor is determined to holding industry employers who cheat their workers legally accountable and committed to recovery these workers the wages they’re owed.”

In fiscal year 2021, the division recovered $13.8 million in back wages for more than 17,000 workers across the nation in the healthcare industry, known for both low wages and high rates of violations. As the U.S. population ages and demand for home healthcare services increases, employment in a variety of healthcare sectors is projected to grow 16 percent from 2020 to 2030 – faster than the average for all occupations – adding about 2.6 million new jobs. 

The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

LOS ANGELES – The U.S. Department of Labor has recovered $370,194 in back wages and liquidated damages from the owners of two restaurants in Los Angeles and Pasadena who illegally denied overtime wages to 54 workers, and attempted to hide their misdeeds.

The department’s Wage and Hour Division found Rober Yousef Babish, wife Ivette, and sons Julian and Joseph – owners of the two Millie’s Cafe locations – failed to pay overtime pay to employees for hours over 40 in a workweek, a violation of the Fair Labor Standards Act. Investigators found that, in some cases, employees worked as many as 37 hours of overtime per week.

In an effort to mask their violations, the owners issued company checks and made cash payments. They also failed to keep records of all hours worked, including overtime hours, which led to recordkeeping violations.

“Wage theft is a serious violation, and restaurant industry workers are too often its victims,” explained Wage and Hour Assistant District Director Susan Bacon in Los Angeles. “These low-wage workers can least afford to have their pay shortchanged, especially by unscrupulous employers like the owners of these Millie’s Café restaurants. We are determined to recover all workers’ hard-earned wages and hold to account those who deny them their due.” 

In addition to recovering $185,097 in overtime back wages and an equal amount in damages, the division assessed $40,446 in civil money penalties for the willful nature of the employers’ violations.

In fiscal year 2021, the Wage and Hour Division recovered more than $34.7 million for more than 29,000 workers in the food service industry. In 2022, the Bureau of Labor Statistics reports near record numbers of job openings and workers in the accommodations and food services industry quitting their jobs. 

“Today’s workers can choose to work for employers who value them, pay them full wages and respect their rights as workers,” Bacon added. “Employers who comply with labor law and appreciate the dignity of work will have a clear advantage when it comes to retaining and recruiting the people they need for their businesses to operate.”

In this case, investigators learned about the employer’s practices through the Employment Education and Outreach alliance (EMPLEO) which manages the multistate toll-free hotline 1-877-552-9832 to assist Spanish-speaking workers with workplace issues.

The Wage and Hour Division also protects workers against retaliation and has regulations that prohibit retaliation, harassment, intimidation or adverse actions against employees that assert their worker rights. Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. Workers and employers with questions can contact the division’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App, now available for Android and iOS devices, to ensure hours and pay are accurate.

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ST. PETERSBURG, FL – A U.S. Department of Labor investigation has found a St. Petersburg restaurant ran afoul of federal law, leading to the recovery of $28,162 in back wages for 36 employees, and changes to the employers’ pay practices. The employer illegally paid kitchen staff, dishwashers, and servers as independent contractors.

The department’s Wage and Hour Division determined that Mi Carreta Restaurant & Bakery Inc. violated several provisions of the Fair Labor Standards Act when it:

• Paid hourly tipped workers and kitchen employees straight-time pay for hours over 40 in a workweek.
• Misclassified cooks, bakers, dishwashers, kitchen supervisor, servers, and helpers as independent contractors.
• Failed to keep time records as the law requires. The division found the employer’s payroll report failed to show required information including the number of hours worked and the issue date on a series of checks was incorrect. These practices violated federal recordkeeping requirements.

“When employees work more than 40 hours in a workweek, employers must pay overtime pay unless an exemption applies,” explained Wage and Hour Division District Director Nicolas Ratmiroff in Tampa, Florida. “Mi Carreta Restaurant & Bakery misclassified some employees as independent contractors and, by doing so, deprived workers of their full wages, benefits and rights, including the employer’s contribution to workers’ Social Security savings and Medicare taxes.”

Opened in 2014, Mi Carreta Restaurant & Bakery Inc. is a family owned Florida business that offers Colombian cuisine to dine-in and delivery customers.

Workers can call the Wage and Hour Division confidentially with questions and the department can speak with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including misclassification of independent contractors and a search tool to use if you think you may be owed back wages collected by the division.

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