After the U.S. Department of Labor identified violations of the Fair Labor Standards Act, Lyons Group, a network of 15 Boston-area restaurants, and owners Patrick Lyons and Edward Sparks are to pay back $424,000 in back wages and liquidated damages to 409 employees.
Additionally, Lyons is required to release a public statement to other restaurant owners that outlines the hazards of using contract labor providers who do fail to abide by FLSA. According to the investigation by the DOL's Wage and Hour Division, employees were not properly compensated for each hour worked, and many were only paid straight time wages instead of time and one-half their regular pay rates for hours beyond 40 in a week, which is mandated by FLSA. Kitchen staff members were mostly affected by this.
"Utilizing contract labor providers does not absolve employers from their responsibility of complying with the FLSA and paying workers the wages they are legally due," says George Rioux, district director for the Wage and Hour Division in Boston. "The use of contract labor providers in the restaurant industry has increased over the past several years along with violations. Employers have a choice. Put these workers on payroll or ensure their labor providers are paying their employees in compliance with the FLSA."
The Lyons Group is also to audit each restaurant's current compliance with FLSA and prevent violations by developing and implementing a software program that identifies employees who work in at least two of the restaurants during the same week. This investigation is part of the Wage and Hour Division's restaurant enforcement initiative in Massachusetts that is aimed at stopping the widespread noncompliance with the FLSA's minimum wage, overtime and record-keeping provisions.
As part of FLSA, covered employees must be paid at least the federal minimum wage of $7.25 per hour in addition to time and one-half their regular rates for hours worked past 40 a week. Employers must oversee accurate records of employees' wages, hours and other conditions of employment, and they cannot retaliate against employees who exercise their rights. Typically, employers that violate FLSA provisions are required to pay employees for back wages and an equal amount in liquidated damages.
"Employers should be aware that, as a general rule, they will pay twice when they underpay their employees," says Michael Felsen, regional solicitor for New England of DOL. "The department will seek not only the back wages due the workers but an equal amount in liquidated damages on their behalf. The time has come for the restaurant industry in Massachusetts to address this issue seriously. Underpaying employees not only hurts workers, it undercuts those employers who have chosen to obey the law in the first place."
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