USDOL Continues to Crackdown on Unlawful Pay Practices in Restaurant Industry

Lyons Group, which owns over 25 major restaurants in the Boston-area, has agreed to pay nearly $500,000 in back wages and liquidated damages to resolve alleged FLSA violations for its restaurant workers who the USDOL found were not paid for all hours worked and for overtime. Lyons Group joins a long list of large and small restaurant operators throughout the country who have faced increased scrutiny from the USDOL in last two years. A central issue in the case was the restaurant group’s contract with a third party vendor who provided most of the workplace labor and was responsible for payroll. The case is an important reminder for restaurant employers about the dangers of relying on a third party to oversee FLSA compliance. In reaching settlement with the Lyons Group, the USDOL reemphasized that utilizing contract labor does not absolve employers of their obligations under the FLSA.  The USDOL Regional Solicitor overseeing the settlement also reminded restaurant employers that, as a general rule, violators who underpay their employees will be on the hook for back wages and an equal amount in liquidated damages. We recommend restaurant employers perform an audit every two years to ensure compliance with both federal and state wage and hour laws and regulations covering restaurants. For more information on our firm’s wage and hour audit services tailored to restaurants, please contact John R. Vreeland, Esq., Director of the firm’s Wage & Hour Compliance Practice Group, jvreeland@genovaburns.com, or Douglas J. Klein, Esq., dklein@genovaburns.com.