Investigations at 10 North Carolina restaurants find more than $510K in back wages owed to 125 workers

RALEIGH, N.C. – Investigations by the U.S. Department of Labor’s Wage and Hour Division have found violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act at 10 San Jose Mexican Restaurant locations throughout the state. As a result, the restaurants will pay a total of $511,745 in back wages to 125 employees. The division’s Raleigh District Office led the initiative.

Violations found include:

• Paying workers a fixed salary without regard to the number of hours they actually worked, which allowed the employer to pay workers less than the federal minimum wage for every hour worked.
• Failing to pay workers overtime when they worked beyond 40 hours in a workweek.
• Requiring wait staff to work only for tips, resulting in minimum wage and overtimes violations.
• Reducing workers’ pay below minimum wage by charging employees for mandatory uniforms.
• Failing to maintain required time and payroll records, and falsifying payroll documents.

“The restaurant industry employs some of our country’s lowest-paid workers, who are often vulnerable to disparate treatment and wage violations. Failure to pay these workers the wages they have worked long hours to earn hurts them and their families, and it provides a competitive advantage over law-abiding employers. Enforcement actions like these should motivate all North Carolina restaurant owners to follow the law and provide a fair day’s pay for a fair day’s work to all employees,” said Richard Blaylock, the Wage and Hour Division’s Raleigh district director.

The San Jose Mexican Restaurants involved in the investigation are:

• San Jose Mexican Restaurant Elizabethtown Inc., 1320 Broad St., Elizabethtown
• San Jose Mexican Restaurant of Lumberton Inc., 3027 North Roberts Ave., Lumberton
• San Jose Mexican Restaurant No. 2 of Lumberton Inc., 5039 Fayetteville Road, Lumberton
• San Jose Mexican Restaurant of Pembroke Inc., 938-B East 3^rd St., Pembroke
• San Jose of Roanoke Rapids Inc., 309 Premier Blvd., Roanoke Rapids
• San Jose Flores Inc., 1565-67 Benvenue Road, Rocky Mount
• San Jose Restaurant Inc., 1700 Raleigh Road Parkway, Suite 120, Wilson
• San Jose of Zebulon Inc., 877 E. Gannon Road, Zebulon
• Flores Restaurant Inc., 1616 S. Madison St., Suite A, Whiteville
• San Jose Mexican Restaurant of Raleigh Inc., 5811 Poyner Village Parkway, Raleigh

In addition to paying back wages, the restaurant owners have agreed to comply with the FLSA.

The FLSA requires the payment of at least the federal minimum wage of $7.25 per hour to covered, nonexempt employees for all hours worked. It also requires that employees receive time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.

Under the FLSA, an employer of a tipped employee is only required to pay $2.13 an hour in direct wages if 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 at least the minimum wage, the employer must make up the difference. Employers may create a tip-pooling or sharing arrangement among employees who customarily and regularly receive tips, but a valid tip pool may not include employees who do not customarily and regularly receive tips, such as dishwashers, cooks, chefs and janitors. Finally, 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.

For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243); the Raleigh District Office at 919-790-2742 or visit http://www.dol.gov/whd.