Mexican Restaurant Group to Pay U.S. Labor Department $628,000 for Wage Violations

Overtime and wage-hour violations are rampant throughout New York's restaurant industry. Many restaurant workers are deliberately kept in the dark about their minimum wage and overtime rights. While the law does afford restaurant owners a certain degree of flexibility to credit server tips against the minimum wage, that is not a license to avoid paying employees altogether.

Buffalo Employer Forced Servers to Live Off Tips Alone, Paid Kitchen Staff Below Minimum Wage

Recently, the U.S. Department of Labor announced a settlement with the operator of a group of Mexican restaurants based in and around Buffalo, New York, and one of its managers, over alleged violations of the Fair Labor Standards Act (FLSA). According to the Department, between 2014 and 2016, the defendants deliberately failed to pay their full-time services any wages at all, forcing them to live solely on tips. Under the FLSA, a restaurant may apply a “tip credit towards its minimum wage obligation” that reflects the difference between the applicable minimum wage and the tips actually received. In no case may the actual cash wages paid fall below $2.13 per hour. It is against the law to simply pay a tipped employee no wages at all.

In addition to the defendants' alleged mistreatment of tipped servers, the Department also alleged that members of the kitchen staff–who are customarily not tipped–were paid a “fixed weekly sum” regardless of hours worked. In many cases, this meant employees worked between 60 and 66 hours a week without receiving any overtime pay, which is mandatory after 40 hours worked in a given pay period. By spreading out the kitchen staff's pay over so many hours, the employees actually earned less than the federal minimum wage. To make matters worse, the Department said the defendants did not keep adequate payroll records.

The defendants opted to enter into a consent judgment with the Department. This is a court-approved settlement. The defendants admitted to the previously described FLSA violations and agreed to the following relief demanded by the Department. Notably, the defendants agreed to pay back wages due to eight specific employees identified by the Department as victims of the previously described FLSA violations. In total, this back pay amounts to just over $314,000. The defendants will then pay an equal amount in “liquidated damages” under the FLSA, bringing the total payment to approximately $629,000.

Contact a New York Overtime and Wage-Hour Lawyer Today

There is no excuse for any New York employer not to comply with its obligations under federal, state, and local labor laws. If you do the work, you deserve to get paid. Employers must not mislead employees as to what the law requires. If you are a victim of wage and overtime hour violations, you need to act quickly to assert your legal rights.

The first thing you need to do is contact an experienced New York City employment attorney who can review your case and advise you of your rights. Contact the Law Offices of Mahir S. Nisar today if you need immediate assistance.