Los Tres Magueyes Inc. has agreed to pay 13 employees a total of $145,636 in back wages following an investigation by the U.S. Department of Labor’s Wage and Hour Division that uncovered violations of the Fair Labor Standards Act’s overtime, minimum wage and record-keeping provisions at the Cary restaurant.

The investigation found that employees were not properly compensated for all hours worked. Investigators determined that servers were paid a direct wage of $3.15 per hour, but only for their first 40 hours of work per week. Servers received only their tips for any hours worked beyond 40, and were illegally required to contribute $200 per week from their tips toward a tip pool, a tip-sharing arrangement that was found to be invalid because it included non-tipped employees. Additionally, servers were not paid overtime compensation at one and one-half times their regular rates of pay for hours worked beyond 40 per week. Other employees, such as kitchen staff, were paid fixed salaries each month, without regard to the number of hours worked. This did not satisfy overtime pay requirements of the FLSA.

The employer also failed to keep accurate records of hours worked, wages paid and proof of dates of birth for workers under 18, in violation of FLSA record-keeping requirements. Additionally, the employer failed to post a required Family Medical Leave Act poster in the workplace.

The employer has agreed to maintain future compliance with the FLSA and to pay the back wages found due in full.
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 at least $2.13 per hour in direct wages, provided that amount plus 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, maintain accurate time and payroll records and comply with restrictions that apply to workers under 18.