Black Bear Burritos LLC to pay $232,295 in back wages to 105 workers following US Department of Labor investigation

MORGANTOWN, W.Va. — Black Bear Burritos LLC will pay a total of $232,295 in back wages to 105 workers employed at two restaurants located in Morgantown. Investigations conducted by the U.S. Department of Labor Wage and Hour Division's Charleston Area Office disclosed minimum wage and overtime violations of the Fair Labor Standards Act, including requiring servers to participate in an illegal tip pool, or tip sharing arrangement. When notified of the violations, the company agreed to pay all back wages and to future compliance.

"Failure to pay legally required minimum wage and overtime poses a serious problem to workers who, in many cases, are already struggling to get by, and also undercuts those employers that choose to obey the law and pay their workers properly," said John DuMont, director of the division's Pittsburgh District Office. "Tipped workers rely on customers for the bulk of their income and are especially vulnerable to hardships caused by improper or illegal tip sharing arrangements, which deprive them of their hard-earned pay."

Investigators found minimum wage violations of the FLSA that stemmed from the employer's practice of requiring servers to participate in an illegal tip sharing arrangement. Under the FLSA, tips are the property of the employees who receive them; however, restaurant operators can benefit by claiming a credit, based on the tips, toward their obligation to pay those employees the full minimum wage.

An employer may not take the employee's tips for an invalid tip pool, such as one that includes employees who do not customarily receive tips. 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 during the pay period. An employer that claims a tip credit is required to pay a tipped employee only $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. The federal minimum wage of $7.25 per hour was last increased in 2009. The federal tip credit's cash wage requirement of $2.13 has not been increased since 1991.

Additionally, the investigations found minimum wage and overtime violations for salaried managers whose salaries were unlawfully paid, in part, by using money from the tip pool. Additional overtime violations were found as the employer based overtime premium pay on employees' cash wages instead of the regular rate, which was the federal minimum wage of $7.25 an hour — the tip credit plus the cash wage.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers also are required to provide employees notice about the FLSA tip credit provisions, to maintain accurate time and payroll records, and to comply with the hours, hazardous orders and other restrictions applying to workers under age 18.

For additional information about the FLSA, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.