Recently, the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) recovered over $500K in employment law violations across three companies. Federal investigations uncovered numerous overtime and other wage and hour violations. The WHD recovered back wages and other penalties in each case. In addition, one investigation revealed alleged child labor violations. Undoubtedly, the DOL continues to actively investigate employment law violations and pursue employers that fail to comply with federal laws under the Fair Labor Standards Act (FLSA). One of many recent examples, the WHD previously found illegal pay practices across three other companies. Associated penalties across those cases totaled a whopping $2M.

Wage and Hour Standards Under the FLSA

The FLSA provides for several federal wage and hour standards. These include a federal minimum wage, mandatory overtime pay, recordkeeping requirements, and youth employment standards. In general, the FLSA covers employers in the private sector, as well as in federal, state, and local governments. As of the publishing of this post, the FLSA entitles covered workers to a minimum wage and overtime pay according to the following:

  • Federal minimum wage of not less than $7.25 an hour, effective July 24th, 2009.
  • Overtime pay rate of not less than one and one-half times the regular rate of pay during hours worked more than 40 a week.

Accordingly, the WHD enforces such federal minimum wage, overtime pay, recordkeeping, and child labor requirements under the FLSA. In order to ensure employers succeed in their compliance efforts, the WHD keeps a team of investigators to support the enforcement of the several labor laws applicable to businesses.

Background of the Companies’ Employment Law Violations

The WHD found numerous employment law violations across three separate companies. These violations included: overtime violations, failure to pay minimum wage, neglecting to keep records, and endangering child workers. In detail, the violations included:

  • Jose Tequila Mexican Grill & Bar – The WHD found that the company failed to pay 97 employees the proper overtime amount of time-and-one-half for hours worked over 40 in a week. These violations occurred across seven of the restaurant’s Virginia locations. Furthermore, the company failed to maintain required records.
  • AS&P Corp. LLC – Investigators found that the California employer illegally placed a cap on overtime at 16 hours per pay period. Subsequently, the employer paid just straight time for hours worked beyond the initial 16 overtime hours. Again, the employer failed to keep proper records. This led to additional violations.
  • Patisserie La Palme D’or – A Honolulu employer denied workers overtime wages they owed. In fact, the employer falsely identified its pastry chef workers as “managers” in order to evade overtime obligations. In addition, the employer failed to pay several employees at least the minimum wage. Finally, the employer violated child labor laws by allowing minor-aged workers to load and operate a trash compactor.

Combined Penalties for Employment Law Violations

Based on the WHD’s investigations, the companies were ordered to pay a combined total of over $500K. This total represented back wages, civil money penalties, and other damages. In detail, the companies paid the following:

  • Jose Tequila Mexican Grill & Bar paid $176,276.71 in back wages
  • AS&P Corp. LLC paid $176,193 in back wages and $6,534 in civil money penalties
  • Patisserie La Palme D’or was put on the hook for $153,070 in back wages and liquidated damages and $34,960 in civil money penalties for the willful nature of their violations.

Emphatically, the DOL’s continued efforts to investigate and rectify employment law violations in multiple industries send a message to federal wage and hour violators. Undoubtedly, these investigations will continue as the DOL seeks to hold labor law violators accountable.