Department of Labor Finds Widespread FLSA Violations by Oregon Restaurants

Tuesday, June 11, 2013

An ongoing enforcement initiative conducted by the U.S. Labor Department's Wage and Hour Division, focused on the restaurant industry in Oregon, has found widespread violations of the Fair Labor Standards Act's minimum wage, overtime and record-keeping provisions. The division is committed to strengthening compliance in this industry and is collaborating with state agencies, industry associations, worker advocates and other stakeholders to promote awareness and compliance with federal labor laws.

The division's Portland District Office, whose jurisdiction covers Oregon, Idaho and southern Washington, conducted more than 110 restaurant investigations in fiscal year 2012; 79 percent of all investigated employers were found in violation of the FLSA. These violations resulted in approximately $740,000 in minimum wage and overtime back wages for 500 restaurant employees.

The division is continuing its enforcement initiative this year to identify and remedy common FLSA violations, such as failing to pay for all hours worked, having employees perform work duties off the clock and incorrectly designating employees as exempt from overtime. Other violations include paying nonexempt employees a flat salary, regardless of any overtime hours worked, and paying cash wages completely off the books. Illegal deductions from workers' wages for uniforms, breakages, customer walkouts and cash register shortages are also common. The division is committed to identifying, remedying and preventing child labor violations, such as restaurant employers allowing minors to operate hazardous equipment, including dough mixers and meat slicers.

Investigators will make unannounced visits to full-service restaurants to assess compliance. When violations are found, the division will pursue corrective action, including payment of back wages, civil money penalties and liquidated damages, to ensure accountability and deter future violations.

In addition to enforcement efforts, the division is conducting outreach to workers, employee associations, community organizations, state and local agencies, and other stakeholders to inform them of the ongoing initiative and encourage their participation in promoting industrywide compliance.

The restaurant industry employs some of our country's lowest-paid workers, who are vulnerable to disparate treatment and labor violations. In addition to this initiative, the Wage and Hour Division has other ongoing enforcement initiatives nationwide to identify and remedy violations that are common in the restaurant industry.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. 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 an 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 with notice of the FLSA tip credit provisions and to maintain accurate time and payroll records, as well as to comply with the restrictions on hours and hazardous occupations applying to workers under age 18.

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