Wage and Hour Division (WHD)

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NEW YORK -- Stout Inc., a Manhattan bar and restaurant, and the company’s two owners have paid 107 employees a total of $70,697 in back wages to resolve a lawsuit filed by the U.S. Department of Labor alleging violations of the federal Fair Labor Standards Act (FLSA).

The suit was filed in the U.S. District Court for the Southern District of New York following an investigation by the department’s Wage and Hour Division that disclosed violations of the FLSA’s overtime and recordkeeping provisions. In addition to the company, the suit named as defendants owners Martin Whelan and Mark Whelan.

The FLSA requires that covered employees be paid at least the federal minimum wage as well as time and one-half their regular rates of pay for hours worked beyond 40 per week. The law also requires that accurate records of employees’ wages, hours and other conditions of employment be maintained, and prohibits retaliation against employees who exercise their rights under the law.

“Employers of low-wage workers should be especially mindful of their obligation under the law to pay their employees properly for all hours worked,” said Philip Jacobson, director of the Wage and Hour Division’s district office in New York City, “and this case should be a reminder that the federal Department of Labor will not hesitate to take them to court to make sure that they do so.”

A consent judgment signed by Judge Richard J. Sullivan prohibits the defendants from future violations of the FLSA’s overtime, recordkeeping and anti-retaliation provisions. It orders the defendants to pay the full amount of back wages covering the period between May 2, 2005, and January 25, 2007. The defendants agreed to entry of the judgment while neither admitting nor denying the allegations contained in the Labor Department’s suit.

The defendants also are ordered to advise their employees in English and Spanish of their rights under the FLSA, and in particular their right to engage in protected activity without fear of retaliation. Finally, the defendants must post official posters explaining employee rights under the FLSA where all employees may view them.

The Wage and Hour Division concluded 30,467 compliance actions and recovered a record $220 million in back wages for more than 341,000 employees in fiscal year 2007. Back-wage collections in fiscal year 2007 represent a 67 percent increase over back wages collected in fiscal year 2001. The number of workers receiving back wages has increased by 58 percent since fiscal year 2001.

For more information about the FLSA, call the Department of Labor’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available on the Internet at www.wagehour.dol.gov, and an interactive “e-laws advisor” providing detailed information about FLSA compliance is available at www.dol.gov/elaws/flsa.htm.

Chao v. Stout Inc. et al; Civil Action Number: 08-CV-00916

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U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.