The U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) recently announced that six Connecticut restaurants and their owners must pay $858 thousand for minimum wage and overtime violations following a federal court’s consent judgment and order. The federal court originally granted the DOL a partial summary judgment in the case last year. Under the recent consent judgment, the employers must pay additional wages and damages and refrain from further Fair Labor Standards Act (FLSA) violations. In May, the DOL made its new Employee Rights Under the Fair Labor Standards Act poster mandatory for all employers.
Background of the Minimum Wage and Overtime Violations
According to the investigation, across the six restaurants, the owners withheld tips, failed to pay the minimum wage, and did not pay overtime for all hours worked over 40 in a workweek. The minimum wage and overtime violations denied a total of 105 employees their entitled wages and tips. In addition, the employers failed to keep accurate records of hours, wages, and other conditions of employment. Wage and Hour Division District Director Donald Epifano stated “these types of violations are common in the restaurant industry, unfortunately.”
Minimum Wage, Overtime, Recordkeeping, and Tips Under the FLSA
One of the most commonly cited federal employment laws, the FLSA sets the nation’s federal wage and hour standards. Under the FLSA, employers pay covered employees at least the federal minimum wage of $7.25 an hour and the correct overtime rate of not less than one and one-half times the regular pay rate for hours worked over 40 in a work week. Denying overtime pay is a violation of the FLSA and applicable state and local wage and hour laws. Additionally, every covered employer must keep certain records for each covered employee. Records do not have to be in a particular form. However, they must include the following information:
- specific identifying information about the employee,
- data on hours worked,
- pay rate, and
- wages earned.
Also, under the FLSA, employers may not keep employee tips that employees receive or participate in tip pools. Any employer that collects tips to facilitate a mandatory tip pool generally must fully redistribute the tips within the pay period.
Consent Judgment in the Case
The U.S. District Court for the District of Connecticut (the District Court) initially granted the DOL’s motion for partial summary judgment in 2022. In its partial summary judgment, the District Court determined that the employers indeed violated the FLSA’s overtime and recordkeeping provisions. After obtaining the partial summary judgment, the employers and the DOL entered into a consent judgment. In February 2023, the District Court entered its consent judgment and order requiring the employers to pay additional back wages, withheld tips, and liquidated damages owed for remaining claims. Furthermore, it forbade the employers from violating the FLSA, providing a consent write of execution should the employers fail to comply with monetary terms. Incorporating the earlier summary judgment of $251,129, the consent judgment requires that the restaurants and owners pay a sum of $858,191.