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April 02, 2012
DOL Enforcement Initiative Focuses on Massachusetts Restaurants

An ongoing U.S. Department of Labor (DOL) enforcement initiative focused on the restaurant industry in Massachusetts has allegedly uncovered several violations of the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (FLSA).

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So far, investigations by the Boston District Office of the department’s Wage and Hour Division (WHD) have found $1,307,808 in back wages due to 478 employees of multiple establishments.

“Our investigations found that several restaurants violated the FLSA by paying employees flat salaries for all hours worked without overtime pay, failing to combine hours worked at multiple locations for overtime purposes, paying incorrect overtime rates to tipped employees, making illegal deductions from employees’ wages and failing to keep accurate records of employees’ hours,” said George A. Rioux, the division’s district director in Boston.

Investigations also found an “emerging trend of misclassifying restaurant workers as independent contractors in order to avoid minimum wage, overtime, and recordkeeping requirements of the FLSA,” said Rioux.

Among the establishments found to have underpaid their workers are 15 Not Your Average Joe’s restaurants in Greater Boston and eastern Massachusetts; six Science Partners restaurants in Cambridge and Boston, including Miracle of Science, Middlesex Lounge and Tory Row; Metropolitan Club restaurants in Chestnut Hill, Dedham and Natick; Noon Hill Grill in Medfield; T.G.I. Friday’s in Framingham; Fresh City restaurants in Burlington, Needham Heights, Newton Upper Falls and Woburn; and Paul W. Marks in Everett. Previously announced cases involved D’Ann’s Restaurant Inc., doing business as D’Ann’s in Abington; 1760 Society Inc., doing business as The Sherborn Inn and The Sherborn Out in Sherborn; and Buchhalter Ltd., doing business as The Upper Crust Pizzeria in Salem. All the establishments have pledged full compliance with the FLSA and have paid or are in the process of paying their employees.

Over the past year, the division also has assessed a total of $295,108 in liquidated damages against Massachusetts restaurants.

Additionally, the department’s Regional Office of the Solicitor has obtained an order of contempt—affirmed by the 1st U.S. Circuit Court of Appeals—against Operations Management Group, which provided labor for The Sherborn Inn, D’Ann’s and Paul W. Marks.

OMG is being fined $1,000 each day that it fails to cooperate and provide requested records to the Labor Department. According to the DOL, employees jointly employed by the establishments and OMG were misclassified as independent contractors and consequently not paid required overtime for hours worked beyond 40 in a week.

The division plans to coordinate with state agencies responsible for enforcing state laws that address such violations and may refer these types of cases to the Internal Revenue Service (IRS) when appropriate. The division also plans to continue outreach and educational efforts with the Massachusetts Restaurant Association to help the organization’s members comply with the law.

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