Austin restaurant owners shorted workers on pay, federal officials say


Nearly all of the Austin-area restaurant owners under scrutiny by federal investigators violated federal labor law by not paying their workers the wages they were legally owed, the U.S. Labor Department announced Tuesday.

The Wage and Hour Division of the Labor Department said it found violations of the Fair Labor Standards Act in 95 percent of the restaurants it investigated from Oct. 1, 2015, to June 30, 2016, down slightly from the 98 percent violation rate in fiscal year 2015.

During that period, investigators helped recover more than $330,000 in back wages for 500 Austin restaurant workers, the Labor Department said.

The Labor Department found that employers:

  • Required employees to work exclusively for tips, with no regard to minimum-wage standards.
  • Made illegal deductions from workers’ wages for walkouts, breakages, credit card transaction fees and cash register shortages, which reduced wages below the required minimum wage.
  • Paid straight-time wages for overtime hours worked.
  • Calculated overtime incorrectly for servers based on their $2.13 per hour base rates before tips, instead of the federal minimum wage of $7.25 per hour.
  • Failed to pay proper overtime for salaried non-exempt cooks.
  • Created illegal tip pools involving kitchen staff.
  • Failed to maintain accurate and thorough records of employees’ wages and work hours.
  • Committed significant child labor violations, such as allowing minors to operate and clean hazardous equipment, including dough mixers and meat slicers.

 

According to the department, federal law requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

Workers can get more information about federal wage laws by calling the Wage and Hour Division at 866-487-9243 or online.


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