South Carolina Restaurant Pays $92k for Wage Theft Violations

South Carolina Restaurant Pays $92k for Wage Theft Violations

June 7, 2019
June 7, 2019
South Carolina Restaurant Pays $92k for Wage Theft ViolationsWaiter Pay logo simple

A South Carolina restaurant has paid $92,670 in back wages to nine employees after an investigation by the U.S. Department of Labor found that servers were working just for tips and kitchen workers were not paid overtime. The investigation found that the restaurant violated the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA).

The Department of Labor’s investigation found El Jalisco Mexican Restaurant violated the minimum wage requirements of the FLSA when it failed to pay any wages to two servers, instead employing them to work only for tips. Waiters and waitresses should be making at least the tipped-minimum wage. Under the Fair Labor Standards Act (FLSA), a restaurant can take a “tip credit” towards its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13 under the FLSA) and the federal minimum wage of $7.25 per hour.

The investigation also revealed that the restaurant violated the overtime provisions of the FLSA when it failed to pay other kitchen workers time-and-a-half for any hours they worked over 40 in a workweek. Restaurant employees should be paid at time-and-a-half (1.5x their regular rate of pay) for all their overtime hours, under both federal and state laws. This includes both front of the house workers like waiters and bartenders, and kitchen workers such as cooks and dishwashers.

Tipped employees overtime rates should calculated as the full overtime wage rate, minus their tip credit. For example, if a waiter in a large New York City restaurant who earns $10.00 per hour is working 40 hours in a week, he should be earning $17.50 for all his overtime hours. The minimum wage in New York is $15.00, which would mean any overtime hours would be paid at $22.50 ($10.00 multiplied by 1.5). The applicable tip credit of $5.00 is then subtracted from that $22.50, resulting in the correct overtime rate of $17.50.

If you have any questions about your overtime rates or your rights as a restaurant worker, please visit our Top Ten Violations page or contact the attorneys of Pechman Law Group at 212-583-9500.

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