In a recent news release by the U.S. Department of Labor (DOL), 13 restaurants in Lawrence, KS were found to have violated federal wage and hour laws. The violations included:
- Paying employees fixed salaries without regard to how many hours they worked, leading to overtime violations when they worked more than 40 hours in a week.
- Failing to combine hours that employees worked at multiple job sites for the same employer, leading to overtime violations when total hours exceeded 40 per week.
- Deducting the cost of uniforms from workers’ pay which reduced their effective hourly wages to below the federal minimum wage.
- Improperly calculating overtime for tipped employees by basing the overtime calculation on their cash wage of $2.13 per hour, rather than on the full minimum wage of $7.25 per hour, as the law requires.
- Failing to pay for all the hours employees worked.
- Requiring servers to work only for tips, and failing to show them on the payroll as employees.
- Failing to maintain accurate records of employees’ wages and hours worked.
It appears the DOL is cracking down on college towns, so as the home of the University of Kansas, Lawrence is an obvious place to start. Similar audits took place in Ann Arbor, MI; Bloomington, IN; Ames, IA; and Iowa City, IA. However, it’s safe to assume the state departments could pick up where the U.S. DOL left off, auditing restaurants and other organizations across these and other states.
Our firm processes payroll for over 300 organizations across the country, the majority of those being restaurant groups. The combination of our web-based proprietary systems and the support and experience of our professional staff provides clients the support they need to face the compliance challenges businesses encounter.
If you believe your organization might be in violation of these regulations, or if you need help with the growing complexity of the payroll process and compliance requirements, please contact us to discuss how we can help.