A recent settlement agreement between an employer and the U.S. Department of Labor (DOL) serves as a reminder that employers must consider all of an employee’s hours—regardless of where the work was performed—for overtime purposes.
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A restaurant with two locations in Arizona, Wally’s American Pub and Grille, has agreed to pay a total of $141,544 to 11 employees after DOL said it failed to properly calculate workers’ overtime pay.
When kitchen staff and servers worked at both locations during the same week, Wally’s did not add their hours together for overtime purposes, DOL determined during an investigation. “As a result, employees did not receive overtime pay at time and a half their regular hourly rates for the hours they worked beyond 40 in a workweek,” DOL said in a press release.
The Fair Labor Standards Act (FLSA) requires that all of an employee’s hours—even those performed at a different location—be counted toward the 40-hour workweek overtime threshold. Even if an employee is performing two different kinds of work with different pay rates, the hours must be combined. With limited exceptions, employers should calculate the weighted average hourly rate each week to determine a worker’s overtime rate, according to DOL regulations (29 C.F.R. §778.115).
To resolve the department’s charges, Wally’s agreed to pay the workers $70,772 in back overtime wages and an equal amount in damages. The restaurant also will pay a $2,805 civil penalty because the violations were willful, according to DOL.
“As this case illustrates, we will fight for the hardworking men and women in the restaurant industry, many of whom are deprived of their rights to receive the overtime premium the law requires and that they deserve,” said Eric Murray, DOL’s Wage and Hour Division director, in a statement. “We will continue to use every enforcement tool at our disposal to protect the rights of these vulnerable workers.”
Employers also should note that hours worked for a joint employer must be counted for overtime purposes. DOL says that joint employment is most likely to exist when: (1) an employee has two or more separate but related or associated employers; or (2) one employer provides labor to another employer and the workers are economically dependent on both employers.
In an Administrator’s Interpretation released earlier this year, the department said it is seeing an increasing number of joint employment situations during its enforcement efforts and plans to target these “fissured” workplaces.