Houston’s Ocean Palace Restaurant settled a “palace revolt” of sorts by paying the princely sum of $125,763 in back wages to 61 current and former kitchen and wait staff, cashiers, hostesses, runners, cart pushers, busboys and dishwashers.
A U.S. Department of Labor’s Wage and Hour Division investigation revealed the restaurant illegally classified some of its employees as exempt under the Fair Labor Standards Act (). In many cases, the restaurant paid employees flat wages regardless of the number of hours they worked. failed to ensure tipped employees received the equivalent of minimum wage, and did not maintain accurate records of the hours worked and wages paid to employees.
Tips for those with tipped employees: Employers cannot assume that tipped employees’ wages and tips add up to minimum wage. Check to make sure.
Another assumption that gets employers into trouble is assuming employees are exempt from the FLSA without analyzing positions to determine whether they meet the law’s standards for exemption. Always consult your attorney when making FLSA determinations. Doing so shows that you take wage-and-hour compliance seriously. That provides some legal cover should your classification decisions be challenged.