U.S. Department of Labor Investigation Results in Restaurant Operator Paying Employees $144,884 in Back Wages and Damages

LUMBERTON, NC – After an investigation by the U.S. Department of Labor’s Wage and Hour Division, a U.S. District Court for the Eastern District of North Carolina has ordered Del Sol Partnership 2 Inc. and its owner, Pablo Salgado, to pay $144,884 in back wages and liquidated damages to 15 employees for violating the overtime, minimum wage, and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

Division investigators found the company paid flat salaries to some employees at its Lumberton and Red Springs restaurants without regard to the number of hours they worked. This practice resulted in overtime violations when those employees worked more than 40 hours in a workweek without overtime pay. The employer also failed to keep any records of the number of hours employees worked.

In addition, Del Sol Partnership 2 Inc. violated minimum wage requirements when it required wait staff to work only for tips, when the FLSA calls for employers to pay tipped employees at least $2.13 per hour in direct wages. An employer is then allowed to take a credit for the employee’s earned tips to satisfy the remainder of its minimum wage obligation.

The court also ruled that Salgado deliberately attempted to conceal his failure to adhere to the FLSA by underreporting the number of employees, instructing them not to cooperate with the Division’s investigators, and threatening to reduce the number of hours for each employee who requested an hourly wage.

“Employees are entitled to receive all of wages they have legally earned. The Department of Labor will use all of the tools at its disposal - including the courts when necessary - to ensure that payment,” said Richard Blaylock, Wage and Hour Division District Director in Raleigh. “Employees or employers with questions about FLSA compliance can reach out to us for help at any time.”

“Unfortunately, we find that too many employers pay their staff flat salaries, or pay wait staff tips only, failing to ensure that they receive the required minimum wage and overtime for the hours they work,” said Regional Solicitor Stanley Keen. “Not only do we ensure workers are not exploited, but we also prevent employers from gaining an unfair competitive advantage by breaking the law.”

For more information about the FLSA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd; the site includes a search tool to learn whether you may be owed back wages collected by the Division.