The U.S. Department of Labor’s Wage and Hour Division (DOL) issued a news release that its investigation recovered $290,314 in rightfully earned wages and damages owed to 95 workers after the pay practices of their employer, an operator of five Maui food truck-restaurants, willfully denied them their full wages.

The DOL found violations by a single enterprise consisting of five corporations  that operate the food truck/restaurant establishments and managed by a single managing member and owner. The investigation of the enterprise’s violations included illegally requiring workers to give a portion of their tips to management, paying them only straight-time rates for hours over 40 in a workweek, and failing to combine all hours they worked at multiple locations. These actions violated the Fair Labor Standards Act (FLSA). 

The recovery of $290,314 for the affected workers constituted $145,157 in unpaid wages and an equal amount in liquidated damages. The DOL also assessed a civil money penalty in the amount of $20,000 due to the reckless nature of the employer’s violations.

“Wages earned should be wages paid, and when an employee works overtime, they should be paid overtime, as required,” said Wage and Hour Division District Director Terence Trotter in Honolulu. “This case demonstrates that violating federal labor laws has consequences. When employers fail to abide by the rules, they are held legally accountable.” 

“Employers who shortchange their workers will find it more difficult to retain and recruit the people to do the work needed to operate their businesses,” Trotter explained. “Those who treat their employees with dignity and respect for their hard work will have the competitive advantage.” 

Takeaway

Employers should ensure their pay practices comply with federal and state wage and hour laws. Employers, managers, and supervisors may not keep any portion of employees' tips under any circumstances. Employers with multiple locations/businesses should also keep up-to-date on joint employer rules for FLSA purposes. Joint employers are required to aggregate employees' hours worked across all locations/businesses in the workweek when calculating overtime (i.e., whether the employee worked more than 40 hours in the work week and how many hours are subject to overtime pay). In this case, the DOL noted that the five food truck/restaurant corporations have the same single managing member/owner. This required the employer to aggregate the employees' hours worked across the corporations for overtime purposes.

Employers with multiple locations and/or businesses should consult with an attorney who specializes in wage and hour law to ensure compliance. HEC members may also contact their HR Consultant or call our hotline at 808-836-1511 with questions.