A federal investigation recently found that a Central City restaurant violated federal labor laws. The U.S. Department of Labor’s Wage and Hour Division ordered the employer to pay eight employees a total of $78,562, a combination of back wages and liquidated damages.
Federal labor law enforcement
The WHD enforces the Fair Labor Standards Act (FLSA), the main federal law that sets out minimum wage, overtime wages, meal and rest breaks, and similar employment requirements. The minimum hourly wage in Kentucky is $7.25 (same as the federal), with a few exceptions, and overtime of at least time-and-a-half is usually required once an employee works more than 40 hours in a work week.
In the Central City restaurant investigation, WHD found the employer often paid monthly salaries in cash no matter how much the employees had worked. This practice resulted in underpaying regular hours that the employer should have paid at minimum wage as well as insufficiently paying overtime for weeks in which employees worked more than 40 hours.
The restaurant also paid one employee who earned tips an hourly cash wage of $2, which was another FLSA minimum wage violation.
The employer also violated the FLSA requirements for keeping records of hours worked.
The WHD order that the restaurant pay almost $80,000 to the eight affected employees reflects the difference between what the employer paid in wages and what it should have paid under minimum wage law as well as an additional amount of liquidated damages, representing a penalty equaling the amount of back pay owed.
Legal guidance for employers and employees
Every Kentucky employer of any size or type that does not have an in-house legal department should develop a relationship with an experienced lawyer to understand the employer’s legal responsibilities toward employees under the FLSA and the Kentucky Wage and Hour Act. Setting up internal practices and policies in compliance with wage-and-hour laws will prevent potential violations, monetary penalties, and significant legal fees.
In the event an employee files a claim with the Department of Labor or the Kentucky Labor Cabinet, an attorney can help analyze the claim at the early stages to determine the best possible course of action to defend or respond to the allegations. If an investigation ensues, the lawyer can respond on the employer’s behalf, either by negotiating a prompt resolution or even advocating at an agency hearing to defend against or minimize the potential liability and exposure.
Likewise, any Kentucky employee who suspects that their employer may be in violation of state or federal wage-and-hour laws should speak with an employment law attorney as soon as possible to understand what legal options are available.