Settlement Reached in Overtime Lawsuit Against Restaurants in Ohio, West Virginia

Settlement Reached in Overtime Lawsuit Against Restaurants in Ohio, West Virginia

NEW YORK — The U.S. Department of Labor has settled a lawsuit that it brought against the owner and general manager of three Mexican restaurants in Ohio and West Virginia for violations of the Fair Labor Standards Act.

The three restaurants agreed to pay 67 employees approximately $190,000 in back wages.

The defendant, Luis Salas, owned and managed Tampico LLC and Acapulco Mexican Restaurant, both located in West Virginia, and Tampico Mexican Restaurant Inc. in Ohio.

According to the lawsuit, Salas violated the minimum and overtime wage rights of employees who might not have known their rights by paying some staff less than the federal minimum wage and failing to pay employees at the overtime pay rate for additional hours worked. These workers were reportedly disadvantaged by language barriers.

Invalid Tip Pool

The DOL’s lawsuit alleged that Salas and the restaurants required employees to contribute to an invalid tip pool.

Under FLSA, employers are permitted to claim a tip credit towards meeting their minimum wage obligations for any employees in a valid tip pool which must be equal to the difference between the required cash wage (at least $2.13) and the federal minimum wage ($7.25). Therefore, the maximum tip credit that an employer can claim under the current minimum wage is $5.12 per hour for each tip-eligible employee.

Tipped employees are those who customarily and regularly receive more than $30 per month in tips and are usually involved in customer service positions. These employees can be part of a tip pool only if it is comprised exclusively of employees who are customarily and regularly tipped.

Employers may fulfill part of its minimum wage obligation to a tipped employee by taking a tip credit, as long as it gives notice to its employees and allows them to retain all the tips they receive, unless they participate in a valid tip pool. However, if the tip pool includes distributions to supervisors and other workers who do not customarily and regularly receive tips, then the tip pooling arrangement violates FLSA.

Recordkeeping Violations

DOL alleged that Salas and the restaurants failed to keep proper wage and hour records and paying employees some of their wages in cash and off the books.

Under FLSA, employers are required to keep accurate record of wages, hours and other information on each employee. Employers must count as hours worked any part, however small, of an employee’s fixed or regular working time or identifiable periods of time where an employee is regularly required to spend on assigned duties.

Employers have to consider the actual work activities performed by the employee and whether those activities are, in reality, part of the work an employee is hired to do.

You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that you and and other employees have a valid claim under FLSA and believe that your wage rights are being violated.. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.

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