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Unpaid Overtime For Tipped Employees

Unpaid Overtime For Tipped Employees

Even though the Fair Labor Standards Act states that hourly employees must be paid overtime for any time beyond 40 hours, some employers still manage to find a way to avoid payment of overtime. This leaves the business owners becoming richer while the employees work harder for less money, often an amount that calculates as less than minimum wage.

The Problem in Dallas

Not Paid OvertimeOne case of failure to pay overtime involves two brothers who were reaping the benefits of their very successful start-up business. The business they built was a Chinese buffet, and the two currently own and manage a total of four similar establishments.

The brothers became persons of interest in a federal investigation during the spring of this year because of reports that tipped employees were working overtime without adequate compensation. The results of the investigation showed that there were more than sixty employees who had been wrongfully denied overtime pay.

Most of the employees at the four buffets in question worked shifts that totaled between 55 and 60 hours every week but were not paid for overtime hours. The majority of these employees relied on tips because they only received a minimum wage of $2.13 per hour. The brothers were unable to provide proof that the wages their employees received through tips and hourly wage equaled the required federal minimum wage of $7.25 per hour.

This new information comes to light following a recent debate that involves the salaries of tipped employees. Most people are of the opinion that when a company is dependent upon its customers to pay the salaries of the workers, there is a huge incentive for that company to engage in tip pooling violations.

The Results of the Investigation

The two brothers who owned the restaurants were not available to make any comments, but a spokesperson for the U.S. Department of Labor in Dallas reported this situation is only one of many throughout the Dallas area. In many cases involving tip-pooling violations, there are additional violations as well. For instance, an employer may charge workers for broken equipment, dishes, or even the uniform that they require for work. The DOL spokesperson states this type of thing is quite frequent in the Dallas-Fort Worth area.

There is nothing to indicate how long the employees of these restaurants had been working more hours than their paychecks indicated before someone reported them. It is important for employees to be aware of their rights and take a stand to call the Department of Labor if they believe the company is violating those rights. In this case, the brothers will be required to pay $188,970 in back wages, an amount that will be divided among the employees contingent upon the overtime hours they worked.

If you work for a company and believe you are not being properly compensated, our firm of lawyers can help you. While this happens more frequently in tip-paying industries, it can happen in other places as well. To find out whether you have a case for unpaid overtime, call our office at 1-800-ATTORNEY today!

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