U.S. Department of Labor Investigation Results in Court Ordering North Carolina Restaurant Owner to Pay $40,555 in Back Wages to 30 Employees

CAROLINA BEACH, NC – The U.S. District Court for the Eastern District of North Carolina has ordered Hurricane Alley LLC, Diver Down LLC – operating Hurricane Alley and The Dive restaurants in Carolina Beach, North Carolina – and their owner David Cole to pay $40,555 in back wages to 30 employees. The action comes after a U.S. Department of Labor Wage and Hour Division (WHD) investigation found violations of minimum wage, overtime, and recordkeeping requirements of the Fair Labor Standards Act (FLSA).

The investigation found that the employer violated the minimum wage requirements when it required tipped-employees to work only for tips. Since the employer paid no wages to the tipped-employees, the employer owed those workers the full federal minimum wage of $7.25 per hour. The employer also incorrectly considered all employees to be independent contractors rather than employees. The inaccurate classification resulted in overtime violations when the employer paid straight time to hourly employees when they worked more than 40 hours in a workweek, instead of the required time-and-one-half their regular rates. Investigators also found the employer failed to maintain required payroll records, an FLSA recordkeeping violation.  

"Employers are obligated to pay employees the wages they have legally earned. Our enforcement ensures employers that violate the law do not to gain an unfair competitive advantage over those that comply," said Wage and Hour Division District Director Richard Blaylock, in Raleigh, North Carolina. "The U.S. Department of Labor encourages all employers to reach out to their local Wage and Hour Division office for information about how to comply, and to avoid violations, in North Carolina employers may reach us at 919-790-2741."

The Department's Office of the Solicitor filed a complaint against Hurricane Alley LLC, Diver Down LLC, and Cole to remedy the violations found in this investigation. In addition to being ordered to pay the back wages; Hurricane Alley LLC, Diver Down LLC, and Cole are enjoined from committing future violations under the FLSA.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/whd.