The owner of Piccolo e Posto restaurant in Guaynabo will have to pay close to $130,000 in unpaid minimum wages as well as $1,472 in unpaid overtime to 26 workers for violations of the Fair Labor Standards Act.
Thus ruled the U.S. District Court for the District of Puerto Rico in a summary judgment in a lawsuit filed by the U.S. Department of Labor on behalf of Piccolo e Posto employees.
The lawsuit stemmed from an investigation by the department’s Wage and Hour Division. According to the Labor Department, investigators found that Lorraine Enterprises, owner Lorraine Lago and general manager Pedro Gonzalez failed to inform employees that tips were part of their wages.
“The defendants’ actions denied employees their rightful pay and undercut those employers who choose to play by the rules and obey the law,” said José Vázquez, director of the Wage and Hour Division’s Caribbean District Office, based in Guaynabo.
“That is unacceptable. The Department of Labor will not hesitate to pursue appropriate legal action on behalf of workers when such violations are found,” he said.
The investigation also found that the operators of Piccolo e Posto “improperly deducted fees from tipped employees’ paychecks for spilled food and beverages, bringing their wages below the required minimum wage, and distributed some of that money to other employees who are ineligible to receive tips,” said the department in a press release.
Also, certain employees were not paid at the proper overtime rate when they worked more than 40 hours in a week.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay at least $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour.
If an employee’s tips combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees notice of the FLSA tip credit provisions, maintain accurate time and payroll records, and comply with the hours, hazardous orders and other restrictions applying to workers under age 18.