How Documenting Can Keep You Out of Court

Jordan Melnick
December 10, 2009

In the latest sign of a possible wage-dispute trend in the restaurant industry, five Houston-based restaurants agreed to fork over more than $334,000 in back pay to 154 current and former employees after the Department of Labor found minimum-wage and overtime violations of the Fair Labor Standards Act (FLSA).

The Department’s Wage and Hour Division discovered that non-exempt employees, entitled to “time-and-a-half” pay for overtime under the FLSA, “were being paid straight time for all hours worked, including those worked over 40 in a workweek,” according to a press release issued Friday.

The Department’s intensified focus on wage disputes, signaled by the hiring of 250 new Wage and Hour investigators this summer, comes amid several recent headline-grabbing cases. Workers from upscale Manhattan restaurant Remi filed a lawsuit in June, claiming the restaurant’s owners violated the FLSA by not paying overtime, withholding tips, and falsifying records. Then, in November, a married couple with five restaurants in western Michigan was ordered to pay more than $2 million in minimum-wage and overtime pay owed to 129 employees after a Labor Department investigation.

Justin M. Swartz, a partner at Outten & Golden in New York who represents employees in labor-law disputes, disagrees that the Act is hard to understand. “I think the law is pretty clear,” he says. “The basic concept is you work and you get paid. What makes [the requirements of the FLSA] complicated is when employers try to shoehorn employees into exemptions under which they don’t belong.”

Swartz says the Labor Department’s enforcement of FLSA under the Obama administration “has made a 180-degree turn from what was happening under the last administration” in terms of protecting low-wage workers. But he says staying within the law is easy.

“Use common sense,” he says. “It’s not difficult to understand that workers have to be paid for all the time that they work. Don’t try to find loopholes and don’t try to stretch the exemptions beyond what they’re meant for. “