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DOL Recovers $219K After Restaurant Cheats Workers with Employee Misclassification

March 18, 2011

Our San Bernardino County employment attorneys continue to be alarmed by the ongoing trend of employee misclassification in low-wage industries--a topic we frequently discuss in our employment blogs, where employees are often misclassified as "exempt" so employers can cut costs by evading their responsibilities to honor overtime and minimum wage laws, employee rest breaks and meal periods, tax responsibilities, and other employee benefits, along with observing other state and federal employment laws and regulations.

In related news, the U.S. Department of Labor has recently gone after a group of restaurants in the Boston area, which reportedly engaged in employee misclassification. According to the DOL, 1760 Society Inc., who does business as various Sherborn restaurants as well as the D'Ann Restaurant, moved many employees to the payroll of a staffing agency, Operations Management Group (OMG), where the employees received less compensation than legally required.

The DOL investigation found that the restaurant would set the employees' hourly rate, reporting the number of hours that each employee would work to OMG--but instead of paying overtime, which the employees previously received on the restaurant payroll, they were paid only for "straight time" by OMG for all hours worked, including any overtime hours. The workers' tax deductions were also not withheld.

According to Nancy Leppink, the DOL Wage and Hour Division's acting administrator, the department wants to send a message to employers across the country that they cannot shirk their legal responsibilities and duties by engaging in employee misclassification and using staffing agencies or labor contractors.

The restaurants have reportedly agreed to pay forty-four employees over $219,000 in back wages and liquidated damages that they are owed under the Fair Labor Standards Act, and have agreed to put the workers back on their own payrolls.

Our Anaheim-based employment and labor attorneys are committed to representing individuals who have experienced employee misclassification in Orange County and throughout Southern California. Call us today for a free consultation at 1-800-872-5925.

US Labor Department recovers more than $219,000 in back wages and liquidated damages for 44 misclassified Boston-area restaurant employees, U.S. Department of Labor Wage and Hour Department News Release, March 7, 2011

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Related Blog Posts:

Employee Misclassification Lawsuit Brings Overtime Compensation to Tractor Operators, California Employment Lawyers Blog, March 14, 2011

Metallica Drummer Sued for Wage and Hour Violations and Employee Misclassification, California Employment Lawyers Blog, February 23, 2011

"Exempt" vs. "Non-exempt" in the California Workplace, California Employment Lawyers Blog, April 15, 2010