Labor: Austin restaurant owners not paying workers wages legally owed

Investigation: Hundreds of workers underpaid

AUSTIN - The U.S. Department of Labor’s Wage and Hour Division says it found numerous violations in Austin’s restaurant industry, in that owners violated federal labor law by not paying workers the wages they were legally owed.

The Labor Department said the division found violations in 95 percent of its investigations of Austin-area restaurants between Oct. 1, 2015 and June 30, 2016. The percentage of violations found was down from 98 percent in fiscal year 2015.

“The current level of noncompliance found in these investigations is not acceptable,” said Dr. David Weil, administrator of the Wage and Hour Division in a release. “WHD will continue to use every tool we have available to combat this issue. This includes vigorous enforcement as well as outreach to employer associations and worker advocates to ensure that Austin restaurant workers receive a fair day’s pay for a fair day’s work.”

In the nine-month period ending in June, Labor said investigators helped recover more than $330,000 in back wages for 500 Austin restaurant workers.

The Labor Department said common violations include employers:

  • 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 based 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.

The Wage and Hour Division said it employs a combination of enforcement and education to boost compliance. In Austin, it is working with employer associations and state agencies to educate the industry about the violations typically found, and to provide those employers with FLSA (Fair Labor Standards Act) compliance assistance information to improve compliance.

Jaymys Sherrer is just getting settled into a new job after leaving his old one three weeks ago. For the past two years he worked as a waiter at a popular South Austin restaurant, but said he decided to leave after getting ripped off.

"They wouldn't pay us overtime," Sherrer said. "Let's say we opened at 11 o'clock, but we all arrived at 10:15 to set up... (Restaurant management would say) 'Oh, don't clock in until your first table,' so we're working off the clock and that's literally every employee there almost."

It turns out this isn't happening at just one restaurant in town. The U.S. Department of Labor reports during its last fiscal year investigators surveyed 70 restaurants in the Austin area. 67 of them were found not paying their employees what they were legally owed.

Officials say one reason restaurant management is able to get away with this is because they employ people who are unfamiliar with the Fair Labor Standards Act.

"I've actually worked for about five different restaurants in my five years here in Austin and the majority of them I can honestly say - yeah, the hush, hush wink, wink, don't clock in until your first table is something that happens regularly," Sherrer said.

Investigators said they are trying to fix this by holding restaurants accountable. So far, they've been able to recover $330,000 in back wages from the 67 cited restaurants. They've given that money to 500 Austin restaurant workers and point to education as a way to end the cycle of management misbehavior.

The FLSA requires covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records. GO HERE for more information about FLSA.

If you think you may be owed back wages collected by Wage and Hour Division, you can search their database here. File a complain with WHD here

(© 2016 KVUE)


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