$934,425 in Back Wages and Damages for Violations of the Fair Labor Standard Act

 
Friday, August 26, 2011
 

Investigators found that kitchen employees were improperly classified as exempt from FLSA overtime pay provisions and consequently paid salaries that did not include compensation for hours worked over 40 in a week. Additionally, every week, tipped employees would receive their tips plus a paycheck that together equaled the minimum wage; however, management required the employees to sign and return the paychecks, and would then cash the checks and put the money back into the restaurant. Through this process, while it appeared that the owners were paying wages, the employees actually were allowed to keep only their tips. Finally, the employers did not maintain accurate records of the hours worked by employees.

Two La Nopalera restaurants in Jacksonville and their owners have been ordered to pay 30 employees $934,425 in back wages and liquidated damages under the terms of consent judgments. The agreements resolve a U.S. Department of Labor lawsuit based on an investigation by its Wage and Hour Division that alleged violations of the Fair Labor Standards Act's minimum wage, overtime pay and record-keeping provisions.


The department's suit was filed in the U.S. District Court for the Middle District of Florida, Jacksonville Division. The following parties agreed to consent judgments resolving the suit: LAJAL Inc., doing business as La Nopalera No. 7 on Beach Boulevard; its owners Javier Valencia, Augustin Hernandez and Maria Hernandez; La Nopalera Mexican Restaurant No. 10 Inc. on Phillips Highway; and its owners Javier Valencia and Luis Cuevas. The judgments hold the restaurants and owners individually and severably liable for future violations of the FLSA and payment of the back wages.

The employees will receive $584,425 in back wages and an additional $350,000 in liquidated damages. The restaurants will be allowed to make the payments in installments over 13 months to the Wage and Hour Division, which will distribute the payments to workers. Other La Nopalera restaurants located in Florida and Georgia were not part of the investigation.

The FLSA requires that covered employees be paid at least the federal minimum wage for all hours worked, as well as one and one-half times their regular rates of pay for hours worked over 40 per week. If certain conditions are met, the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees. The employer must pay tipped employees a cash wage of $2.13 per hour or the state mandated cash wage, whichever is higher; all tips must be retained by the employee except for contributions to a valid tip pooling arrangement; employees must be informed of the tip credit provision; and the amount of tips plus cash wages must equal the federal minimum wage, currently $7.25 per hour. Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.


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