The Wage & Hour Division of the US Department of Labor investigates businesses for possible wage theft, and in a recent nine-month period, found that 95% of Austin, Texas restaurants they checked had committed wage theft. Either DOL is getting really good at targeting businesses, or this is a pervasive problem (discuss). If you think 95% is an aberration, the violation rate for fiscal 2015 was 98%. So maybe DOL is slipping.
The thefts covered 500 hundred workers and amounted to $330,000 in lost wages. According to the DOL list of common violations, restaurants demonstrate tremendous creativity in not paying workers, using a variety of techniques:
- Requiring employees to work exclusively for tips, with no regard to minimum-wage standards.
- Making illegal deductions from workers’ wages for walkouts, breakages, credit card transaction fees and cash register shortages, which reduce wages below the required minimum wage.
- Paying straight-time wages for overtime hours worked.
- Calculating overtime incorrectly for servers, basing it on their $2.13 per hour base rates before tips, instead of the federal minimum wage of $7.25 per hour.
- Failing to pay proper overtime for salaried non-exempt cooks.
- Creating illegal tip pools involving kitchen staff.
- Failing to maintain accurate and thorough records of employees’ wages and work hours.
- Committing significant child labor violations, such as allowing minors to operate and clean hazardous equipment, including dough mixers and meat slicers.
Employers get away with these tactics because workers often don’t know their rights. They might think a certain policy is unfair or wrong, but not realize it’s illegal. So one HourVoice feature asks workers questions, and when they answer, gives them a little rights “Insight.”
For example, HourVoice can ask “Does your employer deduct money from your pay for breakages, credit card fees, or walkouts?” Once the worker answers, we can give them an Insight like “It’s illegal under Federal Law for your employer to make these kinds of deductions. If this is a problem, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243).”