The U.S. Department of Labor (DOL) announced last week that a restaurant owner and operator with locations in New Hampshire and Massachusetts will pay $911,568 for wage theft. Wage and Hour Division (WHD) investigators determined that the employer’s illegal pay practices showed minimum wage, overtime, and recordkeeping violations. The Fair Labor Standards Act (FLSA) sets standards that address all three of the violations. However, unscrupulous employers may often falsify records to hide the fact that they deny overtime pay. This was the subject of an earlier case in which another restaurant employer was fined $1.6 million for denying overtime pay and falsifying records.

Overview of the Wage Theft Case

WHD investigators visited the employer’s three locations across New Hampshire and Massachusetts. They discovered the employer was engaged in wage theft, constituting violations of minimum wage, overtime, and recordkeeping provisions of the FLSA. Specifically, investigators found that the employer’s violations included the following:

  • Not paying some employees for all hours worked at the federal minimum wage rate
  • Failing to pay certain non-exempt employees (cooks, dishwashers, and bussers) the overtime rate of time-and-one-half for hours worked over 40 in a workweek
  • Not combining employees’ hours to calculate overtime when they worked in more than one job category or in more than one of the locations during the same workweek
  • Calculating tipped workers’ overtime rates based on cash wages rather than their regular rates of pay
  • Failing to maintain complete and accurate records of hours worked and payments to employees

Wage and Hour Requirements Under the FLSA

The FLSA provides for several federal wage and hour standards and is one of five commonly cited employment laws that all employers should familiarize themselves with. Denying overtime pay is a direct violation of the FLSA and applicable state and local wage and hour laws. Currently, the FLSA entitles covered workers to the following minimum wage and overtime pay requirements:

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

In addition, every covered employer must keep certain records for each non-exempt employee. Records do not have to be in a particular form. However, they must include specific identifying information about the employee. Employers must also record data on hours worked, pay rate, and wages earned. In order to ensure employers succeed in their compliance efforts, WHD investigators enforce several labor laws applicable to businesses.

Penalties for Employer Wage Theft

In DOL vs. El Rodeo Concord, LLC, et al., the U.S. District Court for the District of New Hampshire gave a consent judgment ordering the employer to pay $455,784 in back wages and an equal amount in liquidated damages. The amount will be awarded to 99 claimants of wage theft, which accounts for all employees at the three locations. In addition to ordering compliance with minimum wage, overtime, and recordkeeping requirements in the future, the district court warned the employer against intimidating or retaliating against employees cooperating with the investigations or exercising FLSA rights.