Wage & Hour Takes Aim At Restaurant & Other Hospitality Employers

February 8, 2024

A slew of recent U.S. Department of Labor Wage and Hour Division (WHD) high dollar recoveries alert restaurant and other hospitality industry employers to clean up their Fair Labor Standards Act (FLSA) wage and hour, H-2B and other workforce compliance.

Popeyes Franchise- $212,000

On February 7, 2024, the Labor Department announced its recovery of $212,000 in Baxley and penalties from California Popeyes franchisee 14th St. Chicken Corp. for violations of federal child labor and wage and hour laws. The WHD says this is the third time that the it has cited the franchisee for violations of the Fair Labor Standards Act

The latest WHD investigation found the Popeyes fast-food chain franchiseedetermined the employer violated the FlSA by shortchanged workers by failing to pay overtime earnings for hours worked over 40 in a workweek.

Additionally, the investigation revealed the franchisee violated child labor rules by hiring children as young as 13-years-old and minors who worked later and longer than permitted by child labor laws at the employer’s three Oakland, Tracy and Newark locations.

Prior violations involved the Oakland and Tracy restaurants in 2003 and 2022, respectively.

For these violations, WHD

  • Recovered $39,826 in unpaid overtime wages and $39,826 in damages for 15 employees;
  • Imposed $121,104 in civil money penalties for child labor violations;
  • Imposed $12,104 in civil money penalties for overtime violations.

In fiscal year 2023, the Wage and Hour Division found child labor violations in more than 950 investigations, resulting in more than $8 million in penalties assessed to employers. on the recoveries.

The announcement warns the Labor Department plans to continue prioritizing child labor law investigations and enforcement quoting Wage and Hour Division Assistant District Director Alberto Raymond as saying:

The U.S. Department of Labor is determined to fight child labor violations in all sectors, including the fast-food industry.”

Sails Restaurant LLC – $184,139

On February 7, 2024, the Labor Department announced its recovery of has recovered $184,139 in back wages and liquidated damages for 56 seasonal guest workers and U.S. workers of a Naples restaurant after finding multiple violations of federal nonimmigrant work program regulations and federal minimum wage and overtime regulations.

The federal H-2B visa program permits U.S. employers to temporarily hire nonimmigrants to perform nonagricultural labor or services. However, the employment must be for a limited, specific period of time, such as a one-time occurrence, seasonal, peak load or intermittent need and the employment must comply with all the conditions for hiring applicable to that program.

The WHD says it’s investigation of Sails Restaurant LLC (Sails) found multiple violations of requirements of the H-2B worker visa program including:

  • Misrepresenting job requirements despite having previously used and knowing the requirements by willfully misrepresenting access to high-paid server positions with unlimited earnings potential when instead no such job existed; promotional positions out of reach for many; and shifting a dining room attendant to another job as a construction laborer;
  • Imposing special experience requirements for H-2B workers to qualify for jobs;
  • Failing to list all qualifications in the job order;
  • Not giving proper notices related to job termination, denying H-2B workers U.S. work status rights;
  • Improperly classifing jobs or excluded job tasks on work orders;
  • Failing to provide job orders or notify workers of their rights; and
  • Not reimbursing visa expenses for H-2B workers, despite being aware of the requirement.

WHD also found Sails violated the Fair Labor Standards Act (FLSA) by illegally keeping the tips of some H-2B and U.S. workers, failing to pay one worker their last paycheck and paying an incorrect overtime rate to tipped employees.

For these violations, WHD required Sales to pay the wrongfully denied wages and assessed $53,536 in civil money penalties.

Wage and Hour Division District Director Nicolas Ratmiroff warned, “Hospitality and food industry employers must understand that regardless of whether the employer is taking a tip credit, employers are prohibited from keeping employee tips or requiring that an employee give their tips to the employer, a supervisor, or manager.

$359,000 Retaliation Judgment

Along with complying with FLSA, child and migrant labor and other rules, employers also are cautioned to avoid retaliation against workers in violation of federal employment laws by first ever federal court order to jointly impose liability against an employer for violation of the FLSA and the Occupational Safety and Health Act (OSH Act).

In a December 15, 2023 judgment, a federal court ordered a Milford sports bar and its owner to pay employees a total of $359,485 in back pay, emotional distress damages, withheld compensation and punitive damages for violating the anti-retaliation provisions of the FLSA and The OSH Act.

The retaliation judgment resulted from a Labor Department lawsuit filed against Milford Sports Bars LLC, doing business as Champions Grill and Bar, and its owner, Loren Drotos, who is also known as Mark Roberts, Mark Drotos and Mark Lawrence.

The suit filed in the U.S. District Court for the District of Connecticut in February, 2022 alleged that in January 2022, the employers threatened an employee who asked the employer to pay him compensation earned then unlawfully terminated employees who participated in an inspection by the Occupational Safety and Health Administration.

The Labor Department also alleged that, after firing employees within days of exercising these federally protected rights, the employers sought to further chill employees from engaging in protected activities and cooperating with federal investigators by sending a message to employees that they should not talk to the Labor Department.

The District Court accepted the Labor Department’s partment’s allegations as true and issued an order granting $6,770 in back pay, $2,715 in withheld wages, $125,000 in emotional distress damages and $225,000 in punitive damages to the affected employees. The court order also prohibits the employers from future violations of the anti-retaliation provisions of the FLSA and OSH Act.

According to Regional Solicitor of Labor Maia Fisher, “The court’s award of $225,000 in punitive damages and over $359,000 in damages overall sends a clear message that the U.S. Department of Labor will not tolerate such behavior.”

Restaurant & Other Hospitality Employers Should Strengthen Compliance & Risk Management

Following on the heels of other similar enforcement actions, these Labor Department actions send a clear signal that restaurant and other hospitality employees should ensure their ability to defend their compliance with the FLSA, H-2B and other foreign labor, OSHA, anti retaliation and other laws enforced by the Labor Department.

The award against Ole Jose Grill & Cantina warns other restaurant and food services employers to use card to properly classify, track hours of work and pay all required wages and overtime.

For More Information

We hope this update is helpful. For more information about these or other health or other legal, management, or public policy developments, please get in touch with the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations GroupHR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Author of a multitude of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws. 

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here

About Solutions Laws Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here, such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2024 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™


Prepare Defenses Against Rising Religious Discrimination Exposures

February 6, 2024

A newly announced religious discrimination settlement reminds employers of the advisability of reviewing and strengthening the defensibility of their grooming, dress code, scheduling and time off and other employment policies, practices and other procedures for applying, granting or denying religious exceptions, and other employment practices to defend against potential discrimination exposures in light of rising religious sensitivities, the Supreme Court’s 2023 ruling in Groff v. DeJoy, 143 S. Ct. 2279 (2023) and emerging Equal Employment Opportunity Commission (EEOC) guidance and enforcement.

Religious Discrimination & Accommodation Under Civil Rights Act

Title VII of the Civil Rights Act of 1964 prohibits discrimination based on religion and requires employers to reasonably accommodate an employee’s religious observance or practice, unless an accommodation would impose an undue hardship. The Civil Rights Act prohibits discrimination in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment. It also prohibits:

  • Forcing an employee to participate (or not participate) in a religious activity as a condition of employment;
  • Subjecting an applicant or employee to offensive remarks about a person’s religious beliefs or practice or other harassment that creates a hostile or offensive work environment or results in an adverse employment decision or other job detriment or certain other types of harassment, whether by the victim’s supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer;
  • Workplace or job segregation based on religion including religious garb and grooming practices;
  • Failing to reasonably accommodate an employee’s religious beliefs or practices, unless doing so would cause a burden that is substantial in the overall context of the employer’s business taking into account all relevant factors, including the particular accommodation at issue and its practical impact in light of the nature, size, and operating cost of the employer; and
  • Retaliating against an employee or applicant based on good faith exercise of his right to be free from religious discrimination or cooperation in investigations or other protected activities.

The duty to provide religious accommodation applies not only to schedule changes or leave for religious observances, but also to such things as dress or grooming practices that an employee follows as part of the employee’s religious reasons such as wearing particular head coverings or other religious dress or hairstyles or facial hair. It also includes an employee’s observance of a religious prohibition against wearing certain garments such as pants or miniskirts. 

Under the Civil Rights Act, the obligation to provide religious accommodation generally applies unless the employer demonstrate that the accommodation of the employee’s religious beliefs or practices would cause undue hardship to the employer. The burden of proving an undue hardship rests on the employer, who must show that the accommodation burden is substantial in the overall context of an employer’s business, taking into account all relevant factors in the case at hand, including the particular accommodation at issue and its practical impact in light of the nature, size and operating cost of the employer. 

The Supreme Court’s 2023 decision in Groff v. DeJoy confirms employers seeking to defend their denial of a request for religious accommodation must be prepared to prove granting the religious accommodation request would impose a significant burden on the employer, holding the defense of undue hardship requires proof a burden that is “substantial in the overall context of an employer’s business” “taking into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.” Mere proof a a “de minimis cost” will not suffice. See also EEOC Notice Concerning the Undue Hardship Standard in Title VII Religious Accommodation Cases.

Blackwell Security Services Religious Discrimination Litigation Settlement

The settlement with Blackwell Security Services, Inc. (Blackwell) recently announced by the EEOC highlights the challenge employers should anticipate facing in defending a denial of an employee or applicant request for exception from a dress code, grooming or other employer policy for religious reasons. 

On January 31, 2024, the EEOC announced Blackwell will pay $70,000 and provide other relief to settle the EEOC’s religious discrimination lawsuit that charged Blackwell wrongfully refused to accommodate a Muslim employee’s religious practice of wearing a beard in observance of his religious beliefs.

According to the EEOC, shortly after Blackwell hired the employee, a Blackwell supervisor told the employee that company policy required all employees be clean-shaven. When the employee requested an exemption from the policy to accommodate his religious practice, Blackwell told him to shave his beard or face termination even though the EEOC determined accommodating his religious practice would impose no cost or operational burden on the business. To avoid losing his job, the employee complied and shaved his beard, causing him significant distress.

Under the consent decree resolving the EEOC lawsuit, Blackwell will pay $70,000 in compensation to the now-former employee. Blackwell will also provide training to relevant management employees on federal laws prohibiting religious discrimination and will report any additional complaints of religious discrimination to the EEOC for the decree’s duration.

Employee Religious Discrimination Risks Rising

The EEOC charge and lawsuit against Blackwell is one of a deluge of religious discrimination charges filed with the EEOC in recent years. In fact, EEOC enforcement data shows that religious discrimination charges received by the EEOC soared from 2,111 in 2021 to 13,814 in 2022 while over the same period settlements rose from 146 in 2021 to 730 in 2022.

Religion-Based Charges (Charges filed with EEOC) FY 2013 – FY 2022
 FY 2013FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022*
Receipts3,7213,5493,5023,8253,4362,8592,7252,4042,11113,814
Resolutions3,8653,5753,7363,8273,9973,6533,0012,5702,0807,453
Settlements331268275266233151171144146730
Reasonable Cause1681161391211192821231035960
Monetary Benefits (Millions)**$11.2$8.7$10.8$10.1$11.2%$9.2$9.9$6.1$9.5$12.8
The chart represents the total number of charges filed and resolved under Title VII alleging religion-based discrimination as compiled by the Office of Enterprise Data and Analytics from data compiled from the EEOC’s Integrated Mission System.  This does not include charges filed with state or local Fair Employment Practices Agencies.  *EEOC notes, “In FY 2022, there was a significant increase in vaccine-related charges filed on the basis of religion. As a result, FY 2022 data may vary compared to previous years.”  ** Does not include monetary benefits obtained through litigation. See https://www.eeoc.gov/data/religion-based-charges-charges-filed-eeoc-fy-1997-fy-2022.

A number of factors have fueled the sharp rise in religious accommodation and other religious discrimination risks. Along with the Supreme Court’s affirmation of the high burden of proof employer must meet to justify refusing to grant religious accommodations to employees in Groff v. DeJoy, a series of religious accommodation guidance issued by the EEOC during and following the COVID-19 pandemic health care emergency and demands for religious accommodation exemptions to COVID-19 mask and vaccination mandates heightened awareness and the volume of religious discrimination claims filed with the EEOC.  See, e.g., What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws. Unsurprisingly, charges from these COVID-19 related and other religious accommodation claims brought since the COVID-19 pandemic health care emergency has and continues to fuel litigation, settlements and judgements. See, e.g., Children’s Hospital Pays $45K To Resolve COVID Vaccine Religious Discrimination Suit.

The already heightened awareness fueled during the COVID-19 health care emergency has been further heightened by EEOC and other governmental guidance and outreach in response to rising potential religious and national origin discrimination concerns arising from the Israeli/Palestinian conflict and various other international events. See e.g., Resolution of the U.S. Equal Employment Opportunity Commission Condemning Violence, Harassment, and Bias Against Jewish Persons in the United States; What to Do If You Face Antisemitism at Work; Anti-Arab, Anti-Middle Eastern, Anti-Muslim, and Antisemitic Discrimination are Illegal; Religious Garb and Grooming in the Workplace: Rights and Responsibilities; Fact Sheet on Religious Garb and Grooming in the Workplace: Rights and ResponsibilitiesEmployment Discrimination Based on Religion, Ethnicity, or Country of Origin; Q&A for Employees: Responsibilities Concerning the Employment of Individuals Who Are, or Are Perceived to Be, Muslim or Middle Eastern; Q&A for Employers: Responsibilities Concerning the Employment of Individuals Who Are, or Are Perceived to Be, Muslim or Middle Eastern.

With these and other events continuing to escalate sensitivities and awareness of federal laws against religious discrimination, health care and other organizations should act to strengthen their ability to recognize and respond defensibly to religious accommodation and other religious discrimination risks whether arising from patients and other customers, employees or others.

Act To Mitigate Religious Discrimination Risks

In the face of the prioritization that the Biden Administration generally and OCR specifically is placing on religious and national origin in connection with the current Israeli-Palestinian hostilities, all covered facilities should brace for heightened oversight and enforcement by OCR the EEOC and other federal agencies, as well as private litigants. These organizations also should guard against retaliation liability, which can result even where the discrimination claim fails.

As a starting point, health care and other organizations should begin by reviewing their existing complaint history, policies, practices, training, reporting and investigation practices within the scope of attorney-client privilege and revise these policies as needed to strengthen their defensibility.

In connection with this review, health care and other organizations should ensure that their policies, procedures and notices clearly prohibit religious discrimination as well as communicate procedures for persons that believe their religious beliefs merit accommodation or otherwise believe they are subject to religious harassment or other discrimination to communicate their request to a representative of the organization appropriately trained to receive, evaluate and respond to the accommodation request defensibly. Most organizations will want to arrange for qualified legal counsel to be readily available to assist the responsible party with these activities. 

Organizations should consider adopting carefully crafted and documented internal procedures for receiving, investigating and responding to religious accommodation request in a manner that promotes their organization’s ability to demonstrate each request is assessed in accordance with the law free from the inappropriate application of assumptions or stereotypes about what constitutes a religious belief or practice or what type of accommodation is appropriate. Organizations should train managers and supervisors to grant religious accommodation requests whenever possible and to refer any questions about the appropriateness or response to any religious accommodation request to the designated responsible party.

When faced with a request for a religious accommodation which the organization believes cannot be implemented without undue hardship, most organizations will want to seek the advice of legal counsel while exploring opportunities to allow the requested or an alternative accommodation on a temporary basis pending further exploration of the requested more permanent accommodation. Appropriate communication and documentation processes also are important. In addition, all organizations will want to ensure that their organization takes appropriate steps to prevent and defend against potential retaliation claims.

Due to the legal and political sensitivity of the practices and analysis involved, employers and others involved in the review of these policies and practices or their application when handling religious accommodation requests or other events raising the potential for religious, national origin, race or related concerns, employers also should consider involving experienced legal counsel about the circumstances, as well as to take advantage of the availability of attorney-client privilege and other evidentiary rules to help mitigate exposures and enhance the defensibility of their actions.

For More Information

We hope this update is helpful. For more information about these or other health or other legal, management or public policy developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations GroupHR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair of its International Employment Law Committee, Chair of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on employment, heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services, retail, manufacturing, hospitality, and other organizations of all types and their technology, data, and other service providers and advisors domestically and internationally with employment, employee benefit, compensation, worker classification, contracting, data privacy and security, Federal Sentencing Guideline and other governance and internal control and other rules specifically relating to workforce management, as well as industry and business specific internal controls and other performance management required to manage regulatory, contractual and operational compliance and risk management. Her experience includes decades of involvement advising and representing employers, educational organizations, health care organizations, and other businesses on Civil Rights Act and other federal, state and local discrimination laws.

Author of a thousands of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws. 

For more information about Ms. Stamer, her legal, business and governmental relations consulting, training, public speaking or other services, experience and involvements , see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here

About Solutions Laws Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here, such as:

IMPORTANT NOTICE ABOUT THIS COMMUNICATION

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2024 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™


Restaurant Pays $167K In Back Wages & Damages For Overtime Violation

February 1, 2024

West Virginia based Ole Jose Grill & Cantina LLC, paid $167,000 in back pay and penalties to 17 tipped employees after the U.S. Department of Labor Wage and Hour Division found the employer improperly calculated their overtime under the Fair Labor Standards Act (FLSA).

FLSA & Food Service

The minimum wage, overtime, and record keeping requirements of the FLSA generally apply to all non exempt restaurant employees with some special rules.

The FLSA requires most restaurants to pay covered non-exempt workers a federal minimum wage of not less than $7.25 per hour. (State law may impose a higher minimum wage.)

An employer may take credit for food which is provided at cost. However, the employer cannot take credit for discounts given employees on food prices.

Tips received by tipped employees may be considered as part of wages, as long as the employer pays the employee not less than $2.13 an hour in direct wages and ensures that the amount of tips received is enough to meet the remainder of the minimum wage. Furthermore:

  • Only employees who customarily and regularly receive more than $30 a month in tips qualify for treatment as tipped employees;
  • The employer must inform the tipped employee of the provisions of FLSA section 3(m) in advance if the employer elects to use the tip credit; and
  • Employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.

Additionally, restaurants must pay overtime at a rate of at least one and one-half times the employee’s regular rate of pay for each hour worked in excess of 40 hours per week.

In determining the regular rate for a tipped employee, all components of the employee’s wages must be considered including cash, board, lodging, facilities, and the tip credit.

Furthermore, deductions made from wages for items such as cash shortages, required uniforms, or customer walk-outs are illegal if the deduction reduces the employee’s wages below the minimum wage or cuts into overtime pay. Deductions made for items other than board, lodging, or other recognized facilities normally cannot be made in an overtime workweek.

Ole Jose Grill & Cantina’s Violations

A Wage and Hour Division investigation found Ole Jose Grill & Cantina violated the overtime requirements of the FLSA by paying tipped employees time and one-half their cash wage for hours over 40 in a workweek instead of time and one-half the applicable minimum wage. Additionally, the investigation found Ole Jose Grill & Cantina misclassified one tipped employee as an independent contractor, paid kitchen staff a flat rate for all hours worked with no overtime premium paid and failed to keep hours worked records for the back of house kitchen employees.

For these violations, the Wage and Hour Division ordered the employer to pay a total of $83,632 in backpay and $83,632 in penalties to 17 workers.

The award against Ole Jose Grill & Cantina warns other restaurant and food services employers to use card to properly classify, track hours of work and pay all required wages and overtime.

For More Information

We hope this update is helpful. For more information about these or other health or other legal, management, or public policy developments, please get in touch with the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297

Solutions Law Press, Inc. invites you to receive future updates by registering on our Solutions Law Press, Inc. Website and participating and contributing to the discussions in our Solutions Law Press, Inc. LinkedIn SLP Health Care Risk Management & Operations GroupHR & Benefits Update Compliance Group, and/or Coalition for Responsible Health Care Policy

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Author of a multitude of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws. 

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here

About Solutions Laws Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested in reviewing some of our other Solutions Law Press, Inc.™ resources available here, such as:

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NOTICE: These statements and materials are for general informational and educational purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstances at any particular time. No comment or statement in this publication is to be construed as legal advice or an admission. The author and Solutions Law Press, Inc.™ reserve the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules make it highly likely that subsequent developments could impact the currency and completeness of this discussion. The author and Solutions Law Press, Inc.™ disclaim, and have no responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication. Readers acknowledge and agree to the conditions of this Notice as a condition of their access to this publication. 

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©2024 Cynthia Marcotte Stamer. Limited non-exclusive right to republish granted to Solutions Law Press, Inc.™