DOL Recovers $410K for Nearly 600 Workers Based on FLSA Violations
June 15, 2022
The U.S. Department of Labor’s (“DOL’s”) Wage and Hour Division (“WHD”) has separately announced its recovery of $410,023 in back wages and liquidated damages for 598 workers in California, Florida, Texas, Hawaii, and Alabama, for violations of the Fair Labor Standards Act ("FLSA" or "Act"). Among other things, the violations related to not paying overtime and failing to include non-discretionary production bonuses into the regular rate of pay when computing overtime rates for workers who worked more than 40 hours in a workweek.
McDonald’s FLSA violations.Seven Yuma, Arizona McDonald’s locations denied full wages owed to 332 workers resulting in$128,796 in back wages and liquidated damages, according to the WHD. The federal investigation disclosed that Calexico, California-based franchise owner and operator of the locations, Jose Leon, violated the FLSA when he failed to pay time-and-one-half an employee’s required rate of pay for hours over 40 in a workweek. The employer had to pay $62,238 in back wages and an equal amount in liquidated damages to workers affected by overtime violations as well as $2,160 in back wages and an equal amount in damages for eight workers whom the owner failed to pay for all the hours they worked. The department also assessed Leon $20,263 in civil penalties based on the nature of the violations.
Contractor overtime rates.Sewer Viewer Inc. of Fort Myers, Florida, a pipe cleaning and inspection contractor, must pay $25,170 in back wages to 12 workers for its FLSA violations. WHD investigations found that the employer failed the include non-discretionary production bonuses into the regular rate of pay when computing overtime rates for workers who worked more than 40 hours in a workweek. The employer’s failure resulted in lower overtime wage rates than the law requires. The agency’s district director reminded employers who supplement wages with bonuses, commissions, and piece-rate wages that they need to adhere to the overtime requirements when they calculate workers overtime rates.
Tip credit and hourly rate.A Texas restaurant, Antonio’s Mexican Restaurant Weatherford Inc., operating as Antonio’s Homestyle Cooking, owes $41,279 in back wages to five workers after investigators discovered FLSA violations. Investigators found that the employer claimed a tip credit but did not pay at least the required $2.13 per hour for all hours worked by the restaurant’s servers. Specifically, the employer failed to pay for any hours over 40 in a workweek and failed to keep accurate time records as required by the FLSA.
Tour operator overtime violations.Hawaii tour operator, Ocean Journeys LLC, operating as And You Creations, must pay $33,399 in back wages and liquidated damages to 14 underpaid workers in addition to $2,618 in penalties for the willful nature of their FLSA violations, according to the DOL. A WHD investigation revealed that the employer denied crew members their overtime wages by paying partial overtime hours at time and one-half their rate of pay and paying the remaining wages at straight time, which the employer listed as “bonus” payments on company payroll records. The employer also failed to include incentive bonuses or commissions in the rates of pay when it calculated overtime pay due. The employer’s willful attempt to avoid their obligation to pay prompted the department’s assessment of civil penalties.
Misapplied FLSA exemption.Two FedEx Corp. subcontractors, Steel City Couriers Inc. and Cahaba Valley Couriers Inc., of Birmingham, Alabama owe $181,379 to 235 workers after WHD investigators found the employer shortchanged workers in violation of the FLSA. According to investigators, the employers misapplied an FLSA exemption from overtime requirements when workers duties involve driving on interstate highways, operating delivery trucks weighing at least 10,000 pounds, or when working for an employer who falls under the regulations governed by the U.S. Department of Transportation. As a result, the employers wrongly claimed that the workers were not entitled to overtime pay under motor carrier regulations and paid them for straight time for all hours or a flat weekly rate without overtime compensation in violation of the FLSA. They also failed to keep accurate records of hours worked as required by the Act.