Federal wage officials recently announced that two Florida restaurants with common ownership failed to properly calculate overtime pay when their employees worked at both locations in the same workweek – sending a stark reminder to all multi-unit operations about the importance of complying with wage and hour law. The Department of Labor (DOL) also found that the restaurants withheld tips earned by service staff to recoup money from customers who failed to pay their tabs, improperly deducted pay for uniforms, and failed to pay tipped workers for all hours worked. In total, the DOL announced on March 9 that it recovered nearly $200,000 in back pay and liquidated damages for 89 employees. Here are four lessons hospitality employers can learn from this settlement to avoid the same fate.
1. Multi-Restaurant Hospitality Groups Should Determine Whether You Could Be Considered a Joint Employer
Do you have multiple restaurants or hotels and share employees among the restaurants and hotels? If so, the DOL may conclude the restaurants or hotels are a joint employer even if each is registered under a different corporate name.
In the Florida case, for example, two St. Petersburg restaurants – Red Mesa Restaurant and Red Mesa Cantina – had two separate corporate names. But the DOL determined that the two restaurants were a joint employer and/or a single integrated enterprise. The agency took the position that operating restaurants with the same owners under different corporate names...
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