Labor & Employment Law Daily Wrap Up, DOL NEWS—WHD recovers $1.2M for 324 workers affected by FLSA OT, tip pool, other infractions, (Jan 10, 2025)

By Pamela Wolf, J.D.

Employers also paid penalties for child labor infractions, punitive damages to employees who suffered retaliation, and lost opportunity wages to a nursing mother whose hours were reduced.

The DOL’s Wage and Hour Division (WHD) separately announced its recovery of a combined $1,204,005 in back wages for 324 workers at employers in Georgia, Michigan, and Minnesota for reported FLSA violations. A California employer must pay $45,570 in civil penalties for child labor infractions and another $3,000 in lost opportunity wages for a nursing employee deprived of proper space and time to express breast milk, whom it harassed and retaliated against by reducing her work schedule. A Massachusetts employer must pay $35,000 in punitive damages to employees against whom it retaliated for their role in an investigation.

Illegal tip pool. Pursuant to a summary judgment order entered by a federal district court in Michigan, Sparty Tacos LLC in East Lansing, TC Tacos LLC in Traverse City, and GR Tacos LLC in Grand Rapids, Michigan, all operating as Barrio Tacos, and its owner, must pay $823,326 in back wages and liquidated damages for 177 workers. The court concluded that the restaurants operated an illegal tip pool that led to violations of FLSA minimum wage and overtime regulations.

The judgment resolves the complaint filed by DOL following a WHD investigation. The court found the employers required tipped employees, who were paid using the tip credit, to surrender a portion of their cash and credit card tips to managers after each shift, and then permitted managers to redistribute these tips to non-tipped employees, including kitchen staff. The employers also failed to pay tipped employees the federal minimum wage, incorrectly paid tipped employees overtime based on the tip credit rate instead of the applicable minimum wage rate, and failed to keep accurate records of employees’ hourly rates of pay and overtime wages due.

Civil money penalties litigated before ALJ. The WHD previously assessed the owner and his three restaurants $23,904 in civil money penalties for the violations associated with this case. That matter is being litigated before the DOL’s Office of Administrative Law Judges.

The DOL filed its lawsuit in the Western District of Michigan, Southern Division; the case is No. 1:23-cv-948.

Failed to combine hours at all locations. YK Murli LLC, dba Baymont Inn & Suites, in Helen, Georgia, paid $290,848 in back wages and liquidated damages for 95 housekeeping and front desk workers after the WHD determined the employer violated the FLSA when it failed to combine employees’ work hours at multiple hotel locations when calculating overtime, and paid straight-time wages for hours over 40 in a workweek. The hotel operator also made inappropriate deductions from the workers’ pay by overcharging them for room and board.

Invalid tip pool, failed to combine hours at all locations. Boludo Holding Co. and its owners will pay $89,830 in back wages and liquidated damages to 51 employees to resolve reported FLSA tip pool, overtime, and other violations at four restaurants in Minneapolis, Minnesota: Boludo El 38; Boludo Downtown; Boludo Uptown; and Boludo Como. The employer terminated one worker at its Uptown restaurant after they spoke with investigators, according to the WHD. The division also assessed the restaurant group with $15,954 in civil money penalties for child labor and tip retention violations.

WHD investigators found that the employers violated the FLSA by: including managers and shift supervisors in a tip pool for servers and others allowed to receive tips, which invalidated the tip pool; not combining hours employees worked at more than one location, which denied employees overtime wages when they worked more than 40 hours in a workweek; allowing at least four workers to routinely use other names and identification numbers to clock-in to avoid paying overtime; paying two employees straight-time rates for overtime hours, instead of time and one-half their regular rate of pay as required; not maintaining accurate employment records with employee start and stop dates and contact information and allowing individual workers to use others’ names to clock-in; failing to distribute tips to workers or provide records showing that tips were paid to workers properly; and permitting a 15-year-old to work outside permitted hours.

Boludo also agreed to create a worksheet to process payroll that will have a weekly run to verify hours over 40 in a week and to pay overtime after 40 hours per week and abide by the FLSA in the future.

Unlawful retaliation. Pursuant to a consent judgment entered by a federal district court in Massachusetts, Evolution Group Inc. and its owners are permanently enjoined from retaliating, taking adverse action, or threatening any adverse action against any current or former employee because that employee exercises their FLSA rights, including speaking with the DOL. The Milford, Massachusetts, construction contractor is also barred from failing to maintain required records of employees’ pay and hours worked or making false or deceptive statements about any such records. In addition, the employers must cooperate with future WHD investigations pay certain employees $35,000 in punitive damages plus applicable interest.

The consent judgment makes permanent many of the requirements of a preliminary injunction that the court approved in March 2024.

The DOL filed its lawsuit in the District of Massachusetts; the case is No. 4:24-cv-40035-MRG.

Child labor, nursing mother violations. The WHD recovered $45,570 in civil money penalties for child labor violations from C Casa Napa LLC, dba C Casa Restaurant and Bar Napa, in Napa, California, after investigators found the restaurant violated the FLSA when it allowed minor employees as young as 14-years-old to work outside of permitted hours during school days and operate hazardous equipment. The restaurant also failed to provide a nursing employee with the proper space and time to express breast milk during their workday and harassed and retaliated against her by reducing her work schedule and earning potential, according to the WHD. The employer owed $3,300 in lost opportunity wages for the nursing employee.

Companies: Sparty Tacos LLC; TC Tacos LLC; GR Tacos LLC; Barrio Tacos; YK Murli LLC; Baymont Inn & Suites; Boludo Holding Co.; Boludo Holding Co.; Boludo El 38; Boludo Downtown; Boludo Uptown; Boludo Como; Evolution Group Inc.; C Casa Napa LLC; C Casa Restaurant and Bar Napa

News: AgencyNews WageHour MinimumWage Overtime Retaliation Discharge RemediesDamages