North Carolina Restaurant to Pay Employees $144k For Overtime Violations

Del Sol Restaurant has been ordered by the U.S. Department of Labor 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).

Department of Labor investigators found that the restaurant paid set salaries to some employees at its Lumberton and Red Springs, North Carolina restaurants without regard to the number of hours they worked. This practice allegedly resulted in overtime violations when those employees worked more than 40 hours in a workweek without overtime pay at a rate of one and a half times their regular rate. The company is also accused of failing to keep any records of the number of hours employees worked.

In addition, the Department of Labor found that the restaurant violated minimum wage requirements when it allegedly required wait staff to work only for tips, although the FLSA calls for employers to pay tipped employees at least $2.13 per hour in direct wages. According to the FLSA, a restaurant is then allowed to take a tip credit for the worker’s earned tips to satisfy the remainder of its minimum wage obligation.

According to the decision, the Department of Labor also ruled that Salgado deliberately attempted to conceal his accused failure to adhere to the FLSA by underreporting the number of employees, instructing them not to cooperate with the Department of Labor’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 the 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 a Department of Labor representative. “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 another Department of Labor representative. “Not only do we ensure workers are not exploited, but we also prevent employers from gaining an unfair competitive advantage by breaking the law.”