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Department of Labor Finds $724,000 in Back Wages Owed to 275 Workers in Madison

U.S. Department of Labor investigators are actively engaged in an education and enforcement effort to make sure employers do not deny hospitality workers wages they have earned legally, according to a press release on Thursday.

Too often, many low-wage restaurant and hotel workers fall victim to their employers’ violations of the Fair Labor Standards Act’s overtime, minimum wage and record-keeping provisions. In college towns like Madison, hospitality jobs may be transient and seasonal, making those who fill these jobs especially vulnerable to unscrupulous employers. 

The department’s Wage and Hour Division ongoing initiative in the hospitality industry has found 24 area restaurants and hotels owe more than $724,000 in back wages to 275 workers. Investigations at additional establishments continue

“Hospitality industry jobs are often filled by students, temporary, or foreign workers – many of whom are new to the workforce. They are often unfamiliar with wage laws and their rights,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “Language barriers, fear of retaliation and fears about immigration status can cause these workers to be among those least likely to speak up leaving them vulnerable to exploitation. We are committed to using every tool at our disposal to ensure that these workers are paid every penny they have rightfully earned, and that employers in this industry who play by the rules do not find themselves at a disadvantage to those who do not.”

Violations disclosed in these investigations include:

  • Paying employees fixed salaries without regard to how many hours they worked, leading to overtime violations when they worked more than 40 hours in a week. 
  • Improperly calculating overtime for tipped employees..
  • Paying overtime in cash, off-the-books,  at “straight time” rates. Deducting the cost of uniforms, breakages, or shortages from workers’ pay; reducing their hourly wages below the federal minimum wage.
  • Failing to keep accurate and thorough records of employees’ wages and hours worked.
  • Failing to pay for all hours worked.
  • Paying servers tips only.
  • Requiring tipped employees to surrender tips to an illegal tip pool; and
  • Requiring minor-aged employees to work outside of the hours allowed by the law.

Investigators found violations at the following 24 Madison area establishments:

  • Laredo’s Mexican Restaurant: (Two Madison and one Fitchburg location) 86 employees are due $402,391.
  • Cocina Real in Middleton: 27 employees are due $118,471
  • World Buffet (D’Onofino Street and South Town Mall, and one location in Monona): 17 employees have received $61,131 in back wages.
  • Food Fight Restaurant Group:17 employees are due $23,603.
  • Journey Sushi and Seafood Buffet: Five employees are due $19,568.
  • Pasqual’s Cantina: (Three locations) Four employees are due $18,388.
  • State Street Brats: 84 employees are due $15,033.
  • Wisco Hotel Group in Fond du Lac: Four employees are due $11,924.
  • Benvenuto’s Italian Grill: Six employees are due $8,454.
  • Bluephies: Two employees have been paid $7,389 in back wages.
  • Takara Japanese Restaurant: (Two locations) 10 employees are due $7,305.
  • Brocach Irish Pub: (Two locations) Two employees are due $6,981.
  • Comfort Suites: One employee is due $2,731.
  • Holiday Inn Hotel & Suites- Madison West: Four employees are due $2,494.
  • Parkway Family Restaurant: Two employees have received $915 in back wages.
  • Staybridge Suites, Madison East Hotel Group, 3301 City View Drive: One employee has been paid $29 in back wages.

During an education and enforcement initiative, in addition to conducting investigations, the division conducts outreach events for employers and industry stakeholders to provide compliance assistance and information on legal rights and responsibilities. The initiatives also raise awareness among workers, community organizations and others regarding federal wage and hour laws and protections.

“We have provided informational sessions to student groups at the University of Madison and the Worker Rights Center of Madison on wage rights and laws,” said David King, district director for the Wage and Hour Division in Minneapolis, which conducted the initiative. “The violations disclosed in this initiative are far too common. We are doing everything we can to increase knowledge and awareness of the laws so workers are paid their hard earned wages.”

In 2014, the division began an education and enforcement initiative in the hospitality industry in Midwest college towns and resorts. The division has conducted investigations of restaurants and hotels in Ann Arbor, Michigan, Bloomington, Indiana, Lawrence, Kansas; Ames and Iowa City, Iowa. The initiative will continue in additional locations. 

Nationwide, the Wage and Hour Division recovered more than $38 million for 46,902 workers in the restaurant industry in fiscal year 2015.

The FLSA 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 for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages, provided that amount plus the tips received equals at least the federal minimum wage of $7.25 per hour. If an employee’s tips, combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees notice of the FLSA tip credit provisions and to maintain accurate time and payroll records. 

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