Tag Archives: Wage and Hour

Hospitality Industry Legal Risks: California Labor Commissioner’s “Wage Claims Unit” Aggressively Investigating Wage Theft Claims And Assessed Record Penalties Of $51Million In 2012; Retaliation Cases Pursued Immediately

“…the wage claims adjudication unit — the largest unit within the labor commissioner’s office that handles more than 35,000 claims a year brought by workers alleging they were denied proper wages — in 2012 heard wage claims within an average of 179 days from Hospitality Industry Wage Violation Lawsuitsthe date of filing, the shortest amount of time since 2008…If employees are retaliated against for cooperating with the state in a workplace investigation, the agency investigates those cases immediately…”

The California Labor Commissioner’s office last year assessed more than $51 million in civil penalties against businesses flouting labor laws, making for record-breaking results that have much to do with the office’s move away from conducting broad employer sweeps to instead zeroing in on bad actors, the agency’s chief told Law360 on Thursday.

The agency, led by State Labor Commissioner Julie Su since April 2011, focuses primarily on adjudicating wage theft claims, inspecting workplaces for wage and hour violations, and investigating retaliation complaints, and the agency’s report in May revealed that the office’s increasingly targeted efforts are paying off.

The agency’s bureau of field enforcement in 2012 uncovered more than $16 million in unpaid minimum and overtime wages owed to workers in the state, more than any previous year on record, and the more than $51 million in total civil penalties assessed in 2012 marked a 150 percent increase from 2010.

But an even more telling finding is how much the bureau has improved on workplace inspections resulting in civil penalty citations. Out of every 10 inspections, eight led to citations last year, resulting in a citation rate of 80 percent, a big increase from an average citation rate of 48 percent between 2002 and 2010, according to the report.

For more:  http://www.law360.com/articles/453869/calif-labor-chief-sharpens-focus-on-workplace-violators

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Filed under Employment Practices Liability, Labor Issues, Liability, Management And Ownership, Risk Management

Hospitality Industry Employment Risks: South Carolina Restaurants Ordered To Pay $391,000 In Back Wages To Workers; Servers Paid Below Mandated $2.13 Per Hour And Received Tips Only

“…the restaurants agreed to maintain future compliance with the FLSA by keeping accurate records of employees’ work hours, wages and other required employment information; paying all employees at least the Hospitality Industry Wage and Hour Litigationfederal minimum wage; and providing overtime compensation and informing employees in advance that the tip credit will be used…”

Three restaurants in South Carolina have been ordered to pay $391,000 in back wages to workers, as the result of a Department of Labor investigation. The restaurants, all individually owned branches of the San Jose Mexican restaurant chain, owe 37 employees wages for overtime and minimum wages. The DOL’s Wage and Hour Division also found violations in record-keeping provisions.

Following widespread noncompliance in the state’s restaurant industry, the Wage and Hour Division began a multiyear enforcement initiative. Since 2009, more than $2.5 million has been paid to workers, following 2,500 investigations.

All three of the restaurants failed to properly compensate employees. Servers were paid below the mandated $2.13 per hour and made to rely on tips for pay. Other employees were paid flat salaries below the minimum wage requirements, with no regard to hours worked.

For more:  http://ohsonline.com/articles/2012/12/21/three-restaurants-must-pay-391000-in-employee-back-wages.aspx?admgarea=news

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Filed under Labor Issues, Liability, Management And Ownership, Training

Hospitality Industry Employment Risks: California Restaurants In "Well-Known Tourist Areas" Investigated By U.S. Dept. Of Labor Agree To Pay $670,000 In "Unpaid Minimum Wages And Overtime"

“…(Wage and Hour Division investigators)…found widespread labor violations among restaurants in well-known tourist areas in San Francisco and throughout Los Angeles County…culture of noncompliance Hospitality Industry Wage and Hour Litigationadversely impacts the wages and working conditions of many low-wage, vulnerable workers…”

Wage and Hour Division investigators with the U.S. Department of Labor conducted comprehensive reviews of payroll records and employment practices in both San Francisco and Los Angeles, in addition to employee interviews, and found that restaurants were violating minimum wage, overtime and record-keeping provisions.

As a result, 273 restaurant workers will divvy up $672,333 in unpaid minimum wages and overtime compensation, according to the feds.

The Fair Labor Standards Act requires that covered employees be paid at least the federal minimum wage of $7.25 per hour, as well as time-and-a-half of their regular rates for hours worked over 40 per week. The law also says employers must keep accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. If employers don’t abide by these rules, they are liable to pay back wages and an equal amount in liquidated damages to employees.

For more:  http://blogs.sfweekly.com/thesnitch/2012/12/restuarant_workers_wage_and_hour_division.php

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Filed under Employment Practices Liability, Labor Issues, Liability, Management And Ownership

Hospitality Industry Legal Risks: Oklahoma Restaurant Group Sued By Labor Department For Violating Fair Labor Standards Act; Fixed Salaries Without Overtime And Tips Alleged

“…FLSA-covered employees, who in some cases worked as many as 72 hours in a week, were paid a fixed salary without overtime compensation for hours beyond 40 in a week. In addition to overtime violations, this practice resulted in minimum wage violations because employees did not always receive at least the federal minimum wage of $7.25 per hour. Investigators also found that wait personnel were required to turn their tips over to management at the end of every shift, which caused their pay to fall below the minimum wage. Finally, the employer did not keep proper records as required…”

The U.S. Department of Labor has filed a lawsuit against Tulsa-based El Tequila LLC and owner Carlos Aguirre after an investigation by the department’s Wage and Hour Division found that the defendants violated the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions. These violations resulted in a total of approximately $1 million in unpaid wages owed to 221 kitchen and wait staff, hosts and bussers at four restaurant locations.

The suit was filed in the Northern District of Oklahoma, Tulsa Division, and it seeks to recover the full amount of back wages for the employees as well as an injunction prohibiting future violations of the FLSA.

“The restaurant industry employs some of our country’s lowest-paid, most vulnerable workers,” said Secretary of Labor Hilda L. Solis. “When violations of the FLSA are discovered, the Labor Department will take appropriate action to ensure workers receive the wages they have earned and to which they are legally entitled.”

Violations were found at the company’s restaurants on Memorial Drive and South Howard Avenue in Tulsa, East 86nd Street North in Owasso and North Elm Place in Broken Arrow.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates 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 are required to provide employees notice of the FLSA’s tip credit provisions, to maintain accurate time and payroll records, and to comply with the act’s restrictions applying to workers under age 18.

For more: http://www.dol.gov/opa/media/press/whd/WHD20122050.htm#.UIqdN4b0_h8

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Filed under Employment Practices Liability, Labor Issues, Liability, Management And Ownership, Risk Management, Training

Hospitality Industry Legal Risks: Wisconsin Restaurant Sued By Former Employees For Violation Of State And Federal Wage Laws; Plaintiffs Seek $46,000 Plus Liquidated Damages And Attorneys Fees

“…servers are paid at a sub-minimum wage rate, plus their tips…the complaint alleges that Ginza management wholly failed to pay any base compensation to Wu and Qin, who only received tips…in addition, the restaurant did not pay overtime compensation when the employees worked over forty hours each workweek…”

“…the restaurant failed to have their servers sign a tip declaration each pay period…and failed to pay the two servers in the amount of $46,000. Under the Fair Labor Standards Act, the servers are entitled to their back pay, plus an equal amount of liquidated damages and attorneys’ fees and costs…”

Two former servers at Ginza Japanese Restaurant in Wauwatosa filed suit Friday in federal court in Milwaukee against Ginza PZW Corp. and Ping Xiao Fang, who operates the business, alleging violations of both state and federal wage laws.

According to one of the plaintiffs, Ginza initially paid her no wages at all, only letting her keep tips. Later, both of the servers assert, Ginza did begin cutting paychecks, but then simply demanded they pay the restaurant back the after-tax portion of their pay.

For more:  http://wauwatosa.patch.com/articles/ginza-restaurant-sued-over-employee-pay

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Filed under Employment Practices Liability, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Hospitality Industry Employment Risks: California Hotel Settles "Wage And Hour Lawsuit" For $2.5 Million; Over 400% Increase In Collective Actions Filed Nationally Since 2000

The case included allegations claiming that the hotel failed to pay employees for the time spent preparing for work and putting on and taking off uniforms that were required to be left at the hotel. Workers also alleged that they were required to fill out time sheets saying they took breaks whether they did or not.

The Hilton Hotel near Los Angeles International Airport has agreed to pay its workers $2.5 million to settle a  lawsuit alleging that the hotel withheld wages, did not pay overtime and failed to provide meal and rest breaks to about 1,200 workers, union officials said Tuesday.

The suit, filed in 2008, covers all hourly employees who worked at the hotel at 5711 W. Century Blvd. from 2004 to 2011. With more than 1,230 guest rooms, the Hilton Los Angeles Airport is one of the largest hotels in Los Angeles.

Nationally, more than 7,000 collective actions were filed in federal court in 2011 alleging wage and hour violations under the Fair Labor Standards Act, an approximately 400% increase since 2000.

For more:  http://latimesblogs.latimes.com/lanow/2012/06/hotel-settlement.html

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Filed under Labor Issues, Liability, Management And Ownership, Risk Management

Hospitality Industry Legal Risks: Hotel And Restaurant Owners Should Consider Requiring Employees To Sign Arbitration Agreements Containing "Class Action Waivers"

“….conducting a wage and hour audit and educating management on wage and hour best practices…(and) requiring employees to sign arbitration agreements containing class action waivers…(can help) prevent employees from asserting wage and hour claims in the form of a class action lawsuit…”

Class action waivers received a boost by the U.S. Supreme Court last year in a widely publicized consumer class action case in which the court found them to be legally enforceable in a mandatory arbitration agreement. The AT&T Mobility v. Concepcion decision has caused some employers to consider including class action waiver language in employee arbitration agreements to prevent class/collective wage and hour lawsuits. However, courts are still struggling with the issue of whether the right to proceed as a class/collective action can be waived under the Fair Labor Standards Act.

Waivers will be more likely to be upheld where they contain provisions providing fair relief for the employee, such as:

  • Employee chooses the venue for dispute resolution;
  • Employee is entitled to injunctive relief and punitive damages, if applicable; or
  • Employer pays some or all of the costs of the dispute resolution and/or waives claims for its own costs and fees.

For more:  http://www.lexology.com/library/detail.aspx?g=0345c278-07bc-4308-bdf2-7c7b16f0ba84

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Filed under Claims, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Hospitality Industry Legal Risks: Hotel And Restaurant Owners Should Consider Requiring Employees To Sign Arbitration Agreements Containing "Class Action Waivers"

“….conducting a wage and hour audit and educating management on wage and hour best practices…(and) requiring employees to sign arbitration agreements containing class action waivers…(can help) prevent employees from asserting wage and hour claims in the form of a class action lawsuit…”

Class action waivers received a boost by the U.S. Supreme Court last year in a widely publicized consumer class action case in which the court found them to be legally enforceable in a mandatory arbitration agreement. The AT&T Mobility v. Concepcion decision has caused some employers to consider including class action waiver language in employee arbitration agreements to prevent class/collective wage and hour lawsuits. However, courts are still struggling with the issue of whether the right to proceed as a class/collective action can be waived under the Fair Labor Standards Act.

Waivers will be more likely to be upheld where they contain provisions providing fair relief for the employee, such as:

  • Employee chooses the venue for dispute resolution;
  • Employee is entitled to injunctive relief and punitive damages, if applicable; or
  • Employer pays some or all of the costs of the dispute resolution and/or waives claims for its own costs and fees.

For more:  http://www.lexology.com/library/detail.aspx?g=0345c278-07bc-4308-bdf2-7c7b16f0ba84

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Filed under Claims, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Hospitality Industry Employment Risks: Labor Department Investigation Forces Massachussetts Restaurants To Repay Employees For Back Wages And Incorrect Overtime

“…investigation found that several restaurants “violated the FLSA by paying  employees flat salaries for all hours worked without overtime pay, failing to  combine hours worked at multiple locations for overtime purposes, paying  incorrect overtime rates to tipped employees, making illegal deductions from  employees’ wages and failing to keep accurate records of employees’ hours….”

“…Even  more serious, our investigations found an emerging trend of misclassifying  restaurant workers as independent contractors in order to avoid minimum wage,  overtime and record-keeping requirements of the FLSA.”

Dozens of eateries around the state are paying employees for back wages as a  result of an ongoing enforcement initiative conducted by the U.S. Department of  Labor.

To date, investigations by the Boston District Office of the department’s  Wage and Hour Division have found $1,307,808 in back wages due to 478 employees  of 34 different Massachusetts restaurants.

Fifteen Not Your Average Joe’s locations have been cited, including the one  on Enon Street in Beverly, which is to pay nine employees a total of $44,201.73  in back wages.

The investigation, according to a release by the U.S. Department of Labor,  uncovered significant violations of the minimum wage, overtime and  record-keeping provisions of the Fair Labor Standards Act in many Massachusetts  restaurants.

Read more: Beverly restaurant to pay employees for back wages – Beverly, MA – Beverly Citizen http://www.wickedlocal.com/beverly/newsnow/x221034920/Beverly-restaurant-to-pay-employees-for-back-wages#ixzz1rJqNdvfO

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Filed under Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Hospitality Industry Employment Risks: Tennessee Restaurant Chain Faces "Class Action Lawsuit" Over Classifying Security Guards As "Tipped Employees"

“…employers who rely on the tip credit are advised to determine how much time each tipped employee spends on “non-tipped” activities, and if these “non-tipped” activities constitute more than 20% of the total working time for any shift, the employer must pay the employee the federal minimum wage ($7.25/hour) for all time spent on non-tipped tasks…” 

The issue in Stewart v. CUS Nashville, LLC is whether security guards at Coyote Ugly are “tipped employees” who can lawfully participate in a tip pool. Stewart was a Coyote Ugly bartender, a non-salaried tipped employee. She claims that Coyote Ugly violated the FLSA by requiring employees in her category to contribute their tips to a tip pool so the tips could be shared with, among others, security guards.

 Stewart argues that the security guards are akin to dishwashers or prep cooks and thus do not meet the definition of “tipped employees” who “customarily and regularly receive tips” under 29 U.S.C. § 203(m), (t).

Coyote Ugly argues that, based on their level of customer interaction, including “hollering” to encourage people to enter, checking identification of those who do enter, being stationed in the front of the house with patrons, assisting female patrons onto and off of the bar to dance, picking up glasses and bottles, and otherwise ensuring a safe customer experience, security guards are more akin to bus boys, maître d’s, silverware rollers, sushi chefs, and other front of the house employees who courts have held may properly share in tips.

Although premature to address the merits, the court granted conditional certification to a class of bartenders, barbacks, or waitresses at company-owned Coyote Ugly saloons who were required to share tips with security guards.

 For more:   http://www.jdsupra.com/post/documentViewer.aspx?fid=5a62a28c-b81a-4014-8c9d-025b758ee10f

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Filed under Claims, Labor Issues, Liability, Management And Ownership, Risk Management