Restaurant pays big for repeat wage-hour violations
- A federal court in Omaha, Nebraska, has ordered the owners and operators of China Palace Inc. to pay $145,987 in back wages, liquidated damages and interest to eight current and former employees following an investigation by the U.S. Department of Labor's (DOL) Wage and Hour Division (WHD) (Acosta v. China Palace, Inc., No. 18-cv-594 (D. Neb. Dec. 28, 2018)).
- Investigators alleged repeat and willful violations of the minimum wage, overtime and recordkeeping requirements of the Fair Labor Standards Act (FLSA), resulting in the assessment of an additional $8,800 in civil money penalties.
- The restaurant had been previously investigated and did not make changes to comply with the law, according to WHD. "Employers must pay their employees all the wages they have legally earned," WHD Assistant District Director Richard Tesarek said in a press release. "This employer had a chance to implement changes and failed to do so."
Enforced by WHD, the FLSA sets the standards for minimum wage, overtime, recordkeeping and youth employment. WHD investigators found that China Palace did not always pay employees the federal minimum wage of $7.25 per hour or pay overtime when employees worked more than 40 hours in a workweek. The FLSA mandates that employers must pay non-exempt employees overtime for any hours worked beyond 40 in a workweek. Overtime pay is equal to time-and-a-half an employee's regular rate of pay.
In recent months, the agency has touted its Payroll Audit Independent Determination (PAID) program, which allows employers to audit their pay practices, self-report any violations of the FLSA and then work with WHD to correct errors and get workers back pay as quickly as possible.
Some employers have hesitated to participate, however, for fear of painting a target on their own backs. Much of that fear stems from the fact that at least 11 states have voiced strong opposition to the PAID program and have all but threatened employers that if they participate in the program, there will be retaliation. Paul DeCamp, former WHD administration and member of the firm at Epstein Becker & Green, PC, previously told HR Dive that the program remains unacceptably risky for employers. "So far I have not advised a single client to participate in the PAID program, and I don’t think that I will, unless and until it becomes clear that the risk of follow-on state enforcement action or private litigation is minimal. In this environment, I think that having a client participate in PAID is inviting more risk than it solves. Which is unfortunate, because I think that the program is potentially good for everybody — except lawyers."
- U.S. Department of Labor Wage and Hour Division (WHD) PAID Program