Restaurant enforcement initiative finds more than $2.27M in back wages, damages owed to more than 3,000 Georgia workers

ATLANTA — U.S. Department of Labor Wage and Hour Division investigations have identified widespread violations of the minimum wage, overtime and record-keeping requirements of the Fair Labor Standards Act in Georgia's restaurant industry. As a result, restaurants are paying a total of $2,277,480 in back wages and damages to more than 3,000 employees.

Since the initiative began two years ago, the division's Atlanta District Office has conducted nearly 400 investigations of full-service restaurants.

Common violations have included the following:

• Paying workers a fixed salary without regard to the number of hours they worked, leading to minimum wage and overtime violations.
• Requiring tipped employees to turn over a portion of their tips to management.
• Reducing workers' pay below minimum wage by charging employees for mandatory uniforms.
• Failing to maintain required time and payroll records.

"Wage violations are common in the restaurant industry where businesses employ many workers who are typically uninformed of their rights or afraid to speak up when they know them. As a result, they're vulnerable to violations — sometimes deliberate — as some employers will intentionally cheat them out of pay to which they are legally entitled," said Wayne Kotowski, the Wage and Hour Division's regional administrator in Atlanta. "The department's initiative is about protecting workers from wage violations and workplace retaliation, and informing them of their rights. It's also about ensuring that restaurant operators who are playing by the rules aren't competing against businesses that cheat."

Jesus Velasquez, a 23-year veteran of the restaurant industry who was employed as a server at Atlanta's El Potro Mexican Restaurant, was denied more than $1,000 in income due to his employer's failure to pay him at least the minimum wage and overtime pay. In particular, his employer failed to pay him the mandatory federal tipped minimum wage rate of $2.13 per hour before tips.

Under the FLSA, when customers tip employees, restaurant operators can benefit by claiming a credit toward their obligation to pay those employees the full minimum wage. An employer that claims this tip credit is
required to pay a tipped employee only $2.13 per hour in direct wages. If an employee's tips, when added to the wages paid directly by the employer, do not equal the federal minimum wage of $7.25 per hour the employer must make up the difference.

The federal minimum wage of $7.25 per hour was last increased in 2009, and the minimum cash wage for tipped workers was last increased in 1991. Tips are the property of the employee who receives them.

Before the Wage and Hour Division's investigation, Velasquez struggled to pay bills. Afterward, he received enough in back wages to pay his car insurance.

Restaurants found to be in violation included the following:

• Antico Pizza Napoletana, Bar Amalfi, Gio's Chicken Amalfitano, El Potro Mexican Restaurant, Atlanta.
• Taqueria Los Hermanos I, Tucker.
• Taqueria Los Hermanos II, Lilburn.
• Taqueria Los Hermanos III, Lawrenceville.
• Taqueria Los Hermanos IV, Suwanee.
• PURE Taqueria, Inman Park and Duluth.
• Sri Krishna Vilas Indian Bar & Restaurant, Smyrna.
• Papi's Cuban & Caribbean Grill, Kennesaw.
• The Pirate's House and Alligator Soul, Savannah.

In addition to paying back wages and damages to affected employees, several restaurant owners have signed agreements with the department demonstrating their commitment to remain in compliance going forward.

"These agreements call for employers to abide by the law and to take specific, proactive steps to monitor compliance," said Eric Williams, director of the division's Atlanta Office. "Our message is clear: We will continue to use every enforcement tool at our disposal to educate employers, change behavior in this industry and enforce the law. We remain vigilant in our pursuit of a fair day's pay for a fair day's work."

The FLSA requires the payment of at least the federal minimum wage to covered, nonexempt employees for all hours worked. Paycheck deductions for patrons who do not pay for their orders, broken dishes or cash register shortages are illegal if they reduce an employee's wages below the minimum wage. Applicable state labor laws may also limit allowable deductions. The FLSA also requires that employees receive time and one-half their regular rate of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

For more information about the FLSA, call the Wage and Hour Division's Atlanta office at 678-237-0521 or its toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.