You’ve heard the question before: Which came first, the chicken or the egg? Believe it or not there really is a restaurant with that name. It’s sort of in my neck of the woods — New Jersey. So here’s another question: What happens when you fail to properly record time, pay overtime, fudge the job descriptions and your workers are immigrants on a visa program? Here’s the short answer: you have one very sticky, messy situation and you pay for it, big time. Read on and we’ll sort it out so you don’t find yourself in the same situation and end up with egg on your face. (See what I did there?)
So here’s what went down: The US Department of Labor discovered (most likely through a complaint) that The Chicken or The Egg failed to pay overtime wages to at least 23 of its employees when they worked more than 40 hours in a workweek. There’s a bit more to the story, though. When workers worked more than 40 hours in a week, the restaurant recorded less than 40 hours on the payroll and paid cash for the extra hours. It didn’t record those payments, either.
So, in addition to the failure to pay overtime the restaurant committed recordkeeping violations, and, it could be argued, committed fraud, as well as wage theft. The consistent failure to record the additional hours and the unrecorded cash payments ramped up the wage and hour violations under the FLSA from negligent to willful, which earned Cramark, the restaurant’s parent company ,significant penalties, to wit: $359,077 in back wages, an equal amount in liquidated damages, $7,792 in temporary visa program back wages to 2 employees and $42,602 in penalties (this specifically targets the willful nature of the violations), for a grand total of $768,548.00.
Oh, and how about those immigration issues: It’s bad enough when you play fast and loose with the FLSA, but when you also play fast and loose with immigrants in the US on a temporary visa, you have other requirements. When you deliberately violate those (or even when you’re not so deliberate) you will likely hear from USCIS or even ICE. The workers in question here were in the US on an H-2B visa program, which, among other things, requires employers to provide each worker a written statement, on or before each pay day of their total earnings each workweek in the pay period. You can probably guess that The Chicken or The Egg didn’t do that. (Could that be a bit of fowl play going on here? Sorry I couldn’t resist.) There’s more, though. Three of the H-2B workers worked as bussers, when the restaurant’s official application for these workers only granted approval for them to work in food preparation. The restaurant also paid these workers less than the prevailing wage for Ocean County, where the restaurant is located.
As always, I will end with some key takeaways:
- Record all hours that all non-exempt employees work, and when they work more than 40 hours in any week, pay them time and a half for all hours in excess of 40;
- Don’t make any payments in cash, “off the books”.
- Don’t pay or record hours or pay differently for workers based on immigration status (that could also support a claim of national origin discrimination);
- If you hire and/or sponsor workers under a temporary visa program, comply with the requirements. If the visa only approves such workers for specific positions, don’t deviate. When USCIS and ICE and the laws they enforce say something is required or prohibited, they really, really mean it!
- OK, I can’t resist this one either: When it comes to obligations under the FLSA and immigration laws, you just can’t wing it.
OK, I’m done with bad puns for now. I think I’ve made my point. See you next week.
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
Before choosing an attorney, you should give this matter careful thought. The selection of an attorney is an important decision. If you find this communication to be inaccurate or misleading, you may report it to the Committee on Attorney Advertising Hughes Justice Complex, CN 037, Trenton, NJ