Labor violations can put pizzerias out of business

The IRS isn’t the only government agency keeping tabs on your pizza restaurant. Beware the wrath of the DOL!



 

Q: Does the U.S. Department of Labor (DOL) have the authority to question my employees?

 

A: The DOL can investigate your company for alleged violations of the Fair Labor Standards Act (FLSA). The DOL’s Wage and Hour Division (WHD) recently investigated one of our restaurant clients over back wages employees claimed they were owed. The WHD auditor sided with the employees and assessed back wages, penalties and interest charges that could force the restaurateur to close his doors!

Here are some key points yo u need to know about the FLSA:

Wages and Overtime—The federal minimum wage for covered nonexempt workers is $7.25 per hour. They also must receive overtime pay at a rate of not less than 1½ times their regular pay rates after a 40-hour work week. (If you’re a multiunit owner and an employee works at two of your locations in a given week, the hours worked at both locations must be combined to calculate overtime pay.)

Paycheck Deductions—Deductions from an employee’s wages—for, say, cash or merchandise shortages or employer-required uniforms—are not legal if they reduce the employee’s wage below the minimum wage or if they reduce the amount of required overtime pay.

Time Off—The FLSA does not require vacation, holiday, severance or sick pay; meal or rest periods; days off for holidays or vacations; premium pay for weekend or holiday work; pay raises or fringe benefits; or a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees.

Work Hours—The FLSA does not limit the number of hours in a day or days in a week an employee may be required to work as long as the employee is at least 16 years old.

Part of our client’s problem was poor documentation with its employee manual. Make sure your employee manual complies with WHD rules. Have your employees read the manual and sign a statement certifying that they’ve read it. Then you can sleep better at night! 

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