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May 3, 2012

The Labor Department’s Wage and Hour Division (WHD) announced in mid-April 2012 that it is launching an enforcement and education initiative focused on the restaurant industry in the Los Angeles area to ensure compliance with the Fair Labor Standards Act’s minimum wage, overtime, recordkeeping, and child labor provisions. In addition, the WHD announced in early April a similar enforcement initiative targeted at restaurants in the Portland, Ore., metropolitan area.

When WHD investigators find violations, they pursue appropriate remedies, including the collection of back wages, the assessment of civil money penalties and liquidated damages, and litigation

As part of the Los Angeles initiative, the division will conduct unannounced investigations at restaurants in the San Fernando Valley, Hollywood, West Hollywood, West Los Angeles, and other areas of Los Angeles County.

In the past six years, WHD’s Los Angeles office found FLSA violations at 72% of the restaurants it investigated. Those violations resulted in $2.2 million in minimum wages and overtime back wages owed to more than 1,400 workers.

From 2006 through 2011, the division’s Portland, Ore., office found FLSA violations at 79% of the 281 restaurants it investigated. Those violations resulted in more than $3 million in minimum and overtime back wages owed to more than 1,600 workers.

During the same period, the division conducted more than 1,800 investigations of restaurants along the West Coast and found that 71% were in violation of the FLSA, resulting in more than $12 million in back wages owed to more than 9,500 employees.

According to the Labor Department, limited profit margins—particularly at low-cost, ethnic food establishments—prompt some
employers to keep their labor costs low by using illegal tactics, including failing to pay employees for all their work hours, forcing employees to perform work duties “off the clock,” and incorrectly designating employees as exempt
from overtime.

Other violations include paying nonexempt employees a flat salary regardless of their overtime hours and paying cash wages completely “off the books,” which can lead to underpayment of wages and to tax liabilities.

Illegal deductions from workers’ wages for uniforms, breakages, customer walk-outs (instances of people leaving without paying for meals), and cash register shortages also are common. WHD also has discovered child labor violations, such as minors operating hazardous equipment such as dough mixers and meat slicers. 05.03.2012

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