Charleston restaurants’ minimum wage, overtime violations result in nearly $217K in back wages for 26 employees

CHARLESTON, S.C. – Investigations by the U.S. Department of Labor’s Wage and Hour Division at three Charleston area restaurants have found violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. As a result, the restaurants will pay a total of $216,586 in back wages to 26 employees.

The investigations found the employers:

• Paid cooks and dishwashers fixed salaries without regard to the number of hours they actually worked.  This resulted in overtime violations when these employees worked more than 40 hours in a week without additional overtime payment as well as minimum wage violations when they worked so many hours that their salaries failed to cover $7.25 per hour.  
• Failed to pay hourly workers minimum wage and overtime for hours they worked beyond 40 in a workweek.
• Required wait staff to work only for tips, resulting in minimum wage and overtimes violations.
• Reduced workers’ pay below minimum wage by charging employees for mandatory uniforms.
• Failed to maintain required time and payroll records.

“The restaurant industry employs some of this country’s lowest-paid workers, who are often vulnerable to disparate treatment and wage violations. Failing to pay these workers the wages they have worked long hours to earn hurts them and their families, and cheats competitors who obey the law,” said Jamie Benefiel, director of the division’s Columbia office that conducted the investigations. “The Wage and Hour Division is resolute in its commitment to increasing compliance in this industry. Our investigators continue to make unannounced visits at restaurants throughout South Carolina and, where violations are found, to use every tool at our disposal to remedy them.”

The restaurants involved in the investigation are:

• El Dorado Mexican Restaurant, 1109 Savannah Highway, Charleston
• Los Reyes Mexican Restaurant, 7620 Rivers Ave. #395, North Charleston  
• Los Reyes Mexican Restaurant, 5117 Ashley Phosphate Road, North Charleston

In addition to paying back wages and committing to comply with the FLSA going forward, the restaurants owners signed an agreement with the department to:

• Procure and install a timekeeping system at each location.
• Provide workers with a record of their work hours each pay period, and allow them to make corrections should the record be inaccurate.
• Provide workers with the Department of Labor contact number as part of their wage statements.
• Post information about the division’s timesheet app in a location visible to all employees.
• Provide a copy of the department’s fact sheet on executive employees to all newly-hired managers.

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 managers, dishwashers, cooks, chefs and janitors. Finally, paycheck deductions for uniforms, 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 Columbia District Office at 803-765-5981 or visit http://www.dol.gov/whd/.