GOLDSBORO, NC – A federal investigation has recovered $157,287 in back wages for 65 workers after finding that a Goldsboro-based restaurant’s pay practices denied the workers their full wages by keeping portions of their earned tips.

The U.S. Department of Labor’s Wage and Hour Division determined that Mugen Inc. – operating as Jay’s Kitchen – kept a percentage of their employees’ tips, a minimum wage violation of the Fair Labor Standards Act. By doing so, the employer lost their right to claim a tip credit and owed the workers the difference between their paid cash wage and the federal minimum wage. Investigators also found Mugen Inc. failed to keep an accurate record of hours worked, provide the dates of birth for employees under the age of 19 and keep addresses for several employees, all FLSA recordkeeping violations.

Investigators also found that Mugen Inc. allowed three, 15-year-old employees to work outside of permitted hours while school is in session, a violation of federal child labor laws. The employees worked more than 3 hours on a school day, more than 18 hours in a school week and past 7 p.m. while school was in session. The division assessed a $1,915 civil money penalty to address the violation.

“Tipped workers in the food services industry rely on their hard-earned tips to make ends meet. Tips are the property of the worker and, under no circumstances, may employers keep any part of their employees’ tips,” explained Wage and Hour Division District Director Richard Blaylock in Raleigh, North Carolina.

“Our investigation also found Mugen Inc. employed minor-aged workers illegally. The Wage and Hour Division assessed more than $1 million in penalties and identified child labor violations in nearly 200 food service industry investigations in the last two fiscal years,” Blaylock added. “We are determined to ensure the well-being and safety of young workers is not compromised, and that employers understand there can be costly consequences for failing to comply with federal child labor laws.”

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. 

“Employers who do not respect their workers’ rights will likely struggle to retain and recruit the people they need to remain competitive, as workers look for opportunities with employers that do,” said Blaylock.

In addition to Jay’s Kitchen, Mugen Inc. also owns and operates Jay’s Sushi & Burger Bar in Goldsboro, Ninja Hibachi Express in Goldsboro and Greenville, Ninja Grill in Goldsboro, Ninja Hibachi & Burger in Mount Olive, and Jay’s 108 in Kinston.

View the division’s statistics on child labor investigations through the U.S. and in the Southeast.

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). Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

Learn more about the Wage and Hour Division, including resources available online where employers, parents, teachers, and minor workers can get information about protections for young workers on the department’s YouthRules! website, as well as learning the seven child labor best practices for employers.

WASHINGTON – The U.S. Department of Labor today announced a final rule to amend H-2A temporary labor certification regulations to protect agricultural workers better, and to update the H-2A application and temporary labor certification process. The final rule will be published in the Federal Register on Oct. 12, 2022.

The H-2A program allows employers to address temporary labor needs by employing foreign agricultural workers when there are not sufficient workers who are able, willing, qualified, and available, and when doing so will not adversely affect the wages and working conditions of workers similarly employed in the U.S.

After the department proposed changes to the H-2A program’s regulations in a Notice of Proposed Rulemaking in July 2019, employers, employer associations, agents, business advocacy groups, state agencies, federal and state elected officials, worker advocates, labor unions, public policy and academic organizations, farmworkers and others submitted tens of thousands of comments. After considering them, the department will publish the final rule, which becomes effective on Nov. 14, 2022. 

“By improving H-2A program regulations, we are strengthening worker protections, meeting our core mission,” said Secretary of Labor Marty Walsh. “Today’s new rule makes several improvements to enhance the integrity of the H-2A program and provide employers and other stakeholders greater clarity.”  

The new rule includes the following important elements:  

• Improves safety and health protections for workers housed in rental or public accommodations. 
• Streamlines and updates bond requirements for labor contractors to better hold them accountable and clarifies joint-employer status for employers and associations. 
• Clarifies the housing certification process to allow state and local authorities to conduct housing inspections. 
• Establishes explicit authority to debar attorneys and agents for their misconduct, independent of an employer’s violations. 
• Makes electronic filing mandatory for most applications to improve employers’ processing efficiency.
• Modernizes the methodology and procedures for determining the prevailing wage to allow state workforce agencies to produce more prevailing wage findings. 

The changes in the final rule will also support the enforcement capabilities of the department’s Wage and Hour Division to address H-2A program fraud and abuse that undermines workers’ rights and hurts law-abiding employers. 

Read the unpublished final rule to amend H-2A temporary labor certification regulations at the Federal Register.

Throughout the U.S., Wage and Hour Division violations of H-2A regulations and recovery of back wages have increased significantly over the past five years. In 2021, the Wage and Hour Division found H-2A violations in 358 cases and collected more than $5.8 million in back wages for more than 7,000 workers.

For more information about H-2A rules and other worker protections enforced by the Wage and Hour Division, contact its toll-free helpline at 866-4US-WAGE (866-487-9243). Calls can be answered in over 200 languages.

Use the convenient 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 devices, to ensure hours and pay are accurate.

HARTFORD, CT – An investigation and litigation by the U.S. Department of Labor have resulted in a federal court ordering three bakeries located in Danbury, Connecticut, and Mount Vernon, New York, and their owner/officer to pay nearly $1 million in back wages and liquidated damages to 74 employees to resolve violations of the Fair Labor Standards Act.

Wage and Hour Division investigators found that Pedro Coelho and Coelho’s businesses – Padaminas NY Bakery II LLC, Padaminas NY Bakery LLC and Padaminas Brazilian Bakery Inc. – willfully violated the FLSA’s overtime requirements when they paid employees, primarily bakers and counter staff, who worked more than 40 hours per week straight time instead of time-and-a-half their regular pay rates. The employers also failed to keep records of employees’ work hours and compensation paid.

The consent judgment and order, entered in the U.S. District Court for the District of Connecticut, requires Coelho and his businesses to pay $952,433 – $476,216 in back wages and an equal amount in liquidated damages – to the 74 affected employees. The employers also must pay $41,568 in civil money penalties to the department due to the violations’ willful nature.

The order prohibits the defendants from violating the FLSA’s overtime and recordkeeping requirements and requires them to cooperate with department FLSA investigations and provide truthful responses, information and documents to investigators. It also prohibits them from soliciting employees to “kick back” the wages or liquidated damages.

View the consent judgment and order.

“This is a significant recovery of back wages and liquidated damages for low-wage workers in Connecticut and New York, who were deprived of the hard-earned wages they rightfully earned and that their families need to make ends meet,” said Wage and Hour Division District Director Donald Epifano in Hartford. “Such violations are avoidable if employers take the time to know and understand their responsibilities under the Fair Labor Standards Act. The Wage and Hour Division is available to answer questions and address concerns and will not tolerate attempts to circumvent federal employment laws.”

“Wage theft is egregious and illegal,” said Regional Solicitor of Labor Maia Fisher in Boston. “The U.S. Department of Labor continues to pursue investigations and legal actions to ensure employees are properly compensated for their work and hold accountable those employers who refuse or fail to comply with the FLSA.”

The division’s Hartford District Office conducted the investigation. The department’s regional Office of the Solicitor in Boston filed the complaint and consent judgment in this case.

In fiscal year 2021, the Wage and Hour Division conducted more than 4,200 investigations in the food services industry, recovering $34.7 million for 29,209 workers.

The FLSA requires that most employees be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek.

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. Employers and workers can call the division confidentially with questions. The department can speak with callers confidentially in more than 200 languages and regardless of immigration status 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. 

ATLANTA – The U.S. Department of Labor is asking Florida highway construction industry employers to participate in a survey to help the department’s Wage and Hour Division establish prevailing wage rates, as required by federal law.

The Davis-Bacon and Related Acts direct the department to set the prevailing wage rates that reflect the actual wages and fringe benefits paid to construction workers in the county where the work takes place.

The department encourages all stakeholders to participate in the survey which includes active highway construction projects in all counties in Florida where construction occurred between June 1, 2021, and May 31, 2022 and is not limited to federally funded construction projects. The data collection period will begin Sept. 30, 2022, and will end Dec. 30, 2022.

Full participation by contractors and interested parties helps to set accurate prevailing wages and develop complete wage determinations. Accurate wages and complete determinations also reduce the need for contractors to request additional labor classifications.

The best way to participate in the survey is online. The division will send notification letters and WD-10 data collection forms to interested parties and contractors known to the agency. To be included, please postmark all data submissions by Dec. 30, 2022. Contractors and other interested parties do not need to have a letter to participate in the survey. The survey can be completed online. Learn more about the surveys.

If you would like to participate, or have questions regarding the survey process and forms, contact Barbara Allen at (770) 738-6451 or Allen.barbara@dol.gov.

Date of action:                     Sept. 20, 2022

Type of action:                    Judgement

Names of defendants:     Reza's Tower Inc., also known as Reza Oak Brook Inc.

                                                     Reza and Ryan Toulabi

Court:                                       U.S. District Court Northern District of Illinois

Docket Number:                 21 CV 1300   

Resolution:  Reza’s Tower Inc., also known as Reza Oak Brook Inc., made final payment on contempt fines of $15,750, and a compensatory fine of $1,662, in attorney's fees for failing to comply with a June 2020 subpoena to provide documents for a U.S. Department of Labor Wage and Hour Division investigation. Payment follows a January 18, 2022 court order enforcing attorney’s fees and daily coercive fines.

Background: District Court Judge Sara L. Ellis granted the motion for attorney’s fees and to enforce coercive fines after the department filed a March 2021 petition for subpoena enforcement. The court also extended its civil contempt finding to owners, Reza and Ryan Toulabi. In October 2021, Reza’s Tower complied with the subpoena. The division’s subsequent investigation found no violations.

Quotes: “Reza’s Tower Inc. and its owners paid a total of $17,412 in fines for failing to comply with a subpoena for its payroll records. After the court order, the employer complied and, following compliance audit of its payroll records, the division did not substantiate violations. They could have avoided contempt fines and other penalties by simply complying with our investigation,” said Wage and Hour District Director Thomas Gauza in Chicago.

“The courts upheld the Department of Labor’s broad investigative authority under the Fair Labor Standards Act, and that employers must comply with the department’s request for records’ audits and on-site inspections that ensure compliance with wage and hour laws,” said Regional Solicitor of Labor Christine Heri in Chicago.

TULSA, OK – A federal investigation into the pay practices of a Tulsa security company has recovered $103,979, in back wages for 55 current and former employees denied their rights to overtime pay for hours over 40 in a workweek.

The U.S. Department of Labor’s Wage and Hour Division determined that PHD Security Services LLLP employed security guards up to 45 hours per workweek without paying time and one-half the required rate of pay when the law requires. The division learned that the employer misunderstood its obligation and operated under an inaccurate belief about an industry standard and without regard to the Fair Labor Standards Act.

“Employers must understand who is, and who isn’t an employee to avoid misclassifying employees as independent contractors. When a perceived industry standard is contrary to the law, employers must follow the law and correctly pay workers minimum wage and overtime,” explained Wage and Hour District Director Michael Speer in Oklahoma City. “The Wage and Hour Division routinely provides assistance and training to help employers understand and comply with federal labor laws and avoid the costly consequences of violations.”

In fiscal year 2021, the division identified more than $6 million in back wages owed to more than 5,300 guard services workers. In its investigations, the division commonly finds violations related to employers failing to pay overtime when required, misclassifying workers as independent contractors and not paying them for time spent on work-related travel, or pre- and post-shift work.

The Bureau of Labor Statistics projects employment in protective service occupations is projected to grow 2 percent from 2021 to 2031, slower than the average for all occupations; though slow, the increase is expected to result in about 72,600 new jobs over the decade. The median annual wage for this group was $46,590 in May 2021, which was slightly higher than the median annual wage for all occupations of $45,760.

“As employers continue to struggle to find the people they need to operate their businesses, those who fail to respect workers’ rights, including their right to receive their full wages, will find it more difficult to retain and recruit workers than those employers who do,” Speer said.

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. The division protects workers regardless of immigration status and can communicate with workers in more than 200 languages.

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

Employer:                                   Heart2Heart Homecare Service Inc.

Investigation site:                  483 John R. Junkin Drive

                                                          Natchez, MS 39120

Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found the employer – a third-party entity that provides workers to private homes needing assistance – failed to pay workers overtime at time-and-one-half their regular rate of pay for hours over 40 in a workweek, as the law requires. By law, a third-party provider cannot claim an overtime exemption. In addition to failing to pay overtime, Heart2Heart failed to maintain a record of the employees’ total overtime hours and the correct hourly rate for hours over 40 each workweek, both Fair Labor Standards Act violations.

Back Wages Recovered: The division recovered $173,506 in back wages for 26 workers.

Civil money penalties assessed: The division assessed a civil money penalty of $11,466 to address repeat violations. Investigators previously found overtime violations during a review of the employer’s records from Feb. 21, 2015, to Feb. 17, 2017, resulting in $79,237 in back wages recovered for 83 employees.                                             

Quote: “Overtime violations in the healthcare industry are a common occurrence. Employers who fail to pay these essential workers the wages they have earned make it harder for workers and their families to make ends meet,” said Wage and Hour Division District Director Audrey Hall in Jackson, Mississippi. “Employees or employers unsure of their legal rights and responsibilities should contact the Wage Hour Division for guidance.”

Background: Heart2Heart Homecare Service Inc. provides workers to offer companionship services to individuals requiring home healthcare. In addition to its Natchez location, the company has locations in Flowood and Gulfport, and employs approximately 160 workers enterprise-wide.

The Wage and Hour Division provides multiple tools to help employers understand their responsibilities and offers confidential compliance assistance to anyone with questions about how to comply with the law. Workers can call the division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages. Help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.

Learn more about the Wage and Hour Division.

Participant:   Louisiana Workforce Commission

Address:           Baton Rouge, Louisiana

Description: The U.S. Department of Labor’s Wage and Hour Division renewed a Memorandum of Understanding with the Louisiana Workforce Commission. The memorandum provides opportunities for federal and state staff cross-training as well as sharing investigation and audit information to increase the identification of labor violations in the state.

Background: The agreement serves as an understanding between the division and the commission to provide joint outreach, training and enforcement. The voluntary agreement outlines procedures for both agencies working together to address employment violations, particularly misclassification.

The division enforces the federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act. The Louisiana Workforce Commission is responsible for enforcing labor laws and regulations related to employment security and workers’ compensation.

Duration: Initially approved February 2012, this MOU will last three years.

“By renewing this agreement, the department and Louisiana Workforce Commission will continue to work together on important issues such as the misclassification of employees as independent contractors. Our partnership improves our ability to enforce wage violations at both the state and federal level,” said Wage and Hour District Director Troy Mouton in New Orleans.

Employer:                                   Tucker Brewing Co. LLC

Investigation site:                  2003 S. Bibb Drive

                                                          Tucker, GA 30084

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found the employer retaliated illegally against two employees after each of them emailed the Tucker Brewing Co.’s owner and asked about their earnings and the employer’s tip-sharing requirements. The employer responded by terminating both workers’ employment despite neither having a history of disciplinary action. The written inquiry to company ownership about pay practices is a protected activity under the Fair Labor Standards Act.

Back Wages and Liquidated Damages Recovered: The division recovered $8,149, in back wages and liquidated damages for the two workers after determining the termination violated federal law.                                   

Quote: “The U.S. Department of Labor enforces federal laws that protect workers’ rights. In this case, two workers were well within their rights to ask about how they were being paid, especially when they believed the employer’s pay practices were unfair or incorrect,” said Wage and Hour Division District Director Steven Salazar in Atlanta. “Employers should review their pay and other employment practices to avoid legal and financial headaches. Listening to employees concerns about workplace compliance can be good for the business and all the company’s workers.”

Background: Tucker Brewing Co. LLC operates a brewery, restaurant and tasting room and has approximately 40 employees.  

The Wage and Hour Division provides multiple tools to help employers understand their responsibilities and offers confidential compliance assistance to anyone with questions about how to comply with the law. Workers can call the division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages. Help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.

Learn more about the Wage and Hour Division.

Employer name:                   Primeforce Inc., operating as Elite Workforce Management

Investigation site:                9301 Frazier Pike

                                                        Little Rock, AR 72206

Investigation findings: The U.S. Department of Labor’s Wage and Hour Division found the employer, Primeforce Inc. – a staffing agency operating as Elite Workforce Management – denied wages to workers by miscalculating attendance bonuses and failing to pay the correct overtime. By doing so, Primeforce paid less than time and one-half for overtime hours, in violation of the Fair Labor Standards Act.

Back wages recovered:         $74,642 in back wages for 628 employees                                              

Quote: “The Wage and Hour Division is here to make sure that all workers, including those who are placed through staffing agencies, receive the wages they have earned,” said Wage Hour District Director Hanz Grünauer in Little Rock. “We provide resources for employees to understand their rights and for employers to understand their requirements under the law. We encourage all who have questions or complaints to contact us.”