Wage and Hour Division (WHD)
Archived News Release — Caution: Information may be out of date.
Date: July 18, 2013
Contact: Diana Petterson or Juan Rodriguez
Phone: 972-850-4710 or 972-850-4709
U.S. Department of Labor
Wage and Hour Division
Release Number: 13-1103-DAL
China Inn Cafe in Katy, Texas, pays more than $106,000 in minimum wage and overtime back wages following US Labor Department investigation
KATY, Texas -- H & WH Inc., doing business as China Inn Cafe, has paid $106,573 in minimum wage and overtime back wages to 14 delivery drivers, cooks and servers after an investigation by the U.S. Department of Labor’s Wage and Hour Division found violations of the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions.
The division’s Houston District Office found that China Inn Cafe paid cooks a salary, without regard to the numbers of hours worked, which was less than the federal minimum wage of $7.25 per hour for all hours worked. The salary paid to the cooks resulted in an overtime violation because cooks did not receive any additional compensation for their hours worked over 40 in a workweek. Additionally, the employer paid drivers and wait staff day rates, which did not include overtime pay for hours worked beyond 40 in a week, as required by the FLSA. The company also failed to maintain accurate pay and time records.
“Failing to pay workers minimum wage and overtime, as required by the FLSA, shortchanges employees and gives some businesses a competitive edge in the restaurant industry,” said Cynthia Watson, the Wage and Hour Division’s regional administrator for the Southwest. “In this case, employees regularly worked up to 66 hours per week. The department will continue to vigorously enforce the FLSA to ensure that workers are compensated in accordance with the law, and that law-abiding business owners are not placed at an economic disadvantage by those employers who do not follow the law.”
China Inn Cafe has agreed to change its pay practices to fully comply with the FLSA in the future. The firm installed a time clock to accurately record hours worked and has paid back wages in full.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 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 accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages, provided 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 the minimum wage, the employer must make up the difference. Employers also are required to provide employees notice of the FLSA tip credit provisions, to maintain accurate time and payroll records and to comply with the hours, hazardous orders and other restrictions applying to workers under age 18.
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 to certain computer employees. To qualify for an exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis of not less than $455 per week. Job titles do not determine exempt status. For an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the department’s regulations.
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) or the division’s Houston District Office at 713-339-5500. Information is also available at http://www.dol.gov/whd.
U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.