Small and midsize business owners, take heed: the U.S. Department of Labor (DOL) recently cracked down on an Orlando-based franchisee of the renowned Pizza chain. The DOL’s Wage and Hour Division unearthed egregious violations of employment laws that resulted in the denial of legally earned wages to 24 employees, ultimately costing the business $120,000 in back wages.
24 Employees Denied Their Legally Earned Wages
The case revolves around a business, which operates a Pizza franchise in Florida. According to the DOL investigation, the franchisee failed to pay overtime wages to its employees, an essential requirement mandated by the Fair Labor Standards Act (FLSA). The FLSA dictates that employees should receive a time-and-a-half rate for all hours worked beyond 40 in a workweek, ensuring fair compensation for their extra efforts.
Furthermore, the business required its servers to rely solely on tips, providing no cash wage—a clear violation of employment laws. The combination of denying overtime wages and forcing employees to depend on tips left these workers without their legally deserved earnings. The FLSA establishes a federal minimum wage, currently set at $7.25 per hour, that all employees in the United States must be paid. Additionally, Florida has its own minimum cash wage for tipped workers, currently at $7.98.
Wages Weren’t the Only Issues
Aside from these wage issues, the business also failed to maintain comprehensive time and payroll records. This neglect of record-keeping violates another provision of the FLSA, making it more challenging to monitor and address employment law violations.
Wildalí De Jesús, the District Director of the Wage and Hour Division in Florida, expressed the importance of upholding employees’ rights, stating, “The operator of this pizza franchise deprived employees of their rightful pay, making it much harder for them to support themselves. We can’t give them time back, but the $120,000 in wages the department recovered for these workers will go a long way toward making them whole.”
The DOL’s investigation highlights the critical responsibility that business owners have to ensure compliance with employment laws. Even if a third-party service provider is involved in payroll management, the ultimate responsibility rests with the employer to guarantee that workers are paid correctly. It’s a sobering reminder that employers must be diligent in adhering to labor laws and treating their employees fairly.
The Wage and Hour Division offers free online tools to assist employers in understanding and adhering to labor laws. These resources can help business owners stay compliant, avoid costly penalties, and maintain the trust and loyalty of their workforce.
Conclusion
This case serves as a stark reminder to small and midsize business owners of the severe consequences of breaking employment laws. Violating the FLSA, whether intentionally or through negligence, can lead to substantial financial penalties and damage to a business’s reputation. Prioritizing compliance with employment laws is not only a legal obligation but also an essential step in fostering a positive work environment and ensuring the well-being of your employees. Business owners are encouraged to educate themselves about labor regulations, make use of available resources, and seek professional advice when needed to steer clear of costly legal entanglements and create a workplace that thrives on fairness and integrity.