NEW YORK, NY — A pair of companies operating 17-restaurants in New Jersey and New York recently agreed to a settlement with the U.S. Department of Labor to resolve claims that the defendants violated several provisions of federal labor and wage laws, including failure to overtime pay. As part of the agreement, Saddle Brook-based A.C.E. Restaurant Group Inc., which operates the Houlihan’s franchise restaurants where the violations took place, will pay back a combined $5,000,000 in back wages and liquidated damages to 1,471 current and former employees.
“The Wage and Hour Division works to ensure that employees receive the wages they have rightfully earned and that employers who fail to comply with the law do not gain an unfair competitive advantage over those who do,” said Wage and Hour Regional Administrator Mark Watson, Jr. in Philadelphia, Pennsylvania.
An investigation by the Labor Department’s Wage and Hour Division determined that A.C.E. Restaurant Group violated the Fair Labor Standards Act (FLSA) when it failed to pay its workers one and a half times their average hourly rate of pay when working more than 40 hours in a week. The defendants further violated the FLSA’s minimum wage provisions by requiring non-tipped employees to contribute their earnings to a tip pool to pay wages for tip-earning workers.
“The U.S. Department of Labor will not hesitate to pursue appropriate legal measures, such as this consent judgment so that employers commit to corrective action, restitution, and ongoing compliance with the Fair Labor Standards Act,” said Regional Solicitor of Labor Jeffrey S. Rogoff in New York.
In addition to paying back millions in overtime and minimum wages to workers, the defendants also agreed to a consent decree where they pledged to abstain for any future violations of the FLSA. While this type of wage theft is an all too common occurrence in the restaurant industry, the FLSA gives workers the right to take legal actions against their employers to recover their back pay.
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