Separate US Department of Labor investigations lead to fines in wage and hour and misclassification cases.

Misclassification. The US District Court for the Eastern District of North Carolina has ordered a restaurant operator and its owner to pay $40,555 in back wages to 30 employees for wage-and-hour violations after the DOL’s Wage and Hour division determined the workers were misclassified as independent contractors.

Hurricane Alley LLC, Diver Down LLC – operating Hurricane Alley and The Dive restaurants in Carolina Beach, North Carolina – and their owner, David Cole, were found to be in violation  of minimum wage, overtime, and record-keeping requirements of the Fair Labor Standards Act (FLSA).

The investigation found that the employer violated the minimum wage requirements when it required tipped-employees to work only for tips. Since the employer paid no wages to the tipped-employees, the employer owed those workers the full federal minimum wage of $7.25 per hour. The employer also incorrectly considered all employees to be independent contractors rather than employees. The inaccurate classification resulted in overtime violations when the employer paid straight time to hourly employees when they worked more than 40 hours in a work week, instead of the required time-and-one-half their regular rates. Investigators also found the employer failed to maintain required payroll records, an FLSA record-keeping violation.

Overtime. A Japanese restaurant in Florida will pay $72,425 in back wages and liquidated damages to 15 employees after the department’s Wage and Hour Division found violations of overtime and record-keeping provisions of the FLSA.

According to the department, the restaurant paid its employees, which is obtained via a staffing firm, straight-time rates for all the hours that they worked — failing to pay them overtime when they worked more than 40 hours in a workweek. The employer also violated the record-keeping requirements of the FLSA when it failed to maintain time and payroll records and to display the required federal minimum wage poster.

“Employers are responsible for ensuring they pay employees properly for all the hours that they work whether they are hired directly by the company or through a staffing agency,” said Wage and Hour Division District Director Tony Pham, in Miami. “We encourage employers to contact us with any questions they may have, and to use the variety of tools we offer to help them understand their obligations and to comply with the law. Violations like these can be avoided.”