Mass. restaurants cited for labor violations; group blames confusing laws

BOSTON (Legal Newsline) - The U.S. Department of Labor announced Thursday that an investigation of restaurants in Massachusetts revealed significant violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act.

The Boston District Office of the department's Wage and Hour Division has found $1,307,808 in back wages were owed to 478 employees of multiple establishments.

Among the restaurants are 15 Not Your Average Joe's restaurants in Greater Boston and eastern Massachusetts; six Science Partners restaurants in Cambridge and Boston; Metropolitan Club restaurants in Chestnut Hill, Dedham and Natick; Noon Hill Grill in Medfield; T.G.I.Friday's in Framingham; Fresh City restaurants in Burlington, Needham Heights, Newton Upper Falls and Woburn; and Paul W. Marks in Everett.

"The restaurant industry employs some of our country's lowest paid workers, who are vulnerable to exploitation," Secretary of Labor Hilda L. Solis said.

"In response to the extensive level of noncompliance we discovered, we will expand our efforts to bring the industry into compliance to ensure that employees receive the minimum wage and overtime wages required by law."

George Rioux, the division's district director in Boston, added, "Our investigations found that several restaurants violated the FLSA by paying employees flat salaries for all hours worked without overtime pay, failing to combine hours worked at multiple locations for overtime purposes, paying incorrect overtime rates to tipped employees, making illegal deductions from employees' wages and failing to keep accurate records of employees' hours.

"Even more serious, our investigations found an emerging trend of misclassifying restaurant workers as independent contractors in order to avoid minimum wage, overtime and record-keeping requirements of the FLSA."

The DOL said that the "FLSA requires covered employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages."

Peter Christie, CEO of the Massachussetts' Restaurant Association commented on the DOL actions. He said his organization was told that every year the DOL targets different industries for audits and the restaurants were the industry for this year. They notified their members of this.

Christie said that the communiques do not tell the entire story. He said he personally knows many of the owners of the restaurants mentioned by the DOL. They would not be concerned about "saving pennies" for overtime.

"The restaurants would never knowingly violate a labor law," he said.

"Many of the laws are difficult to understand. For example, Massachusetts does not require overtime. But the federal laws do. When there is a difference between state and federal laws, the restaurant owner is obliged to follow the most stringent. But it is confusing and violations are not intentional."

Christie remarked that he cannot complain about the DOL's enforcement procedures - they are cooperating with the owners. But the independent restaurateur does not have a human relations department that can easily follow convoluted laws regarding overtime rates and payroll policies. MRA is working to keep members informed.

During the past year, DOL has assessed a total of $295,108 against Massachusetts restaurants. Additionally, the DOL's Regional Office of the Solicitor, which provides legal enforcement support to the Wage and Hour Division and other departmental agencies, has obtained an order of contempt - affirmed by the U.S. Circuit Court of Appeals for the First Circuit - against Operations Management Group, which provided labor for The Sherborn Inn, D'Ann's and Paul W. Marks.

OMG is being fined $1,000 each day that it fails to cooperate and provide requested records to the Labor Department. Employees jointly employed by the establishments and OMG were misclassified as independent contractors and consequently not paid required overtime for hours worked beyond 40 in a week.