Wage and Hour Division (WHD)

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WYTHEVILLE, Va -- Marjan Corp, doing business as Ramada Inn in Wytheville, will pay $23,207 to 59 employees after a U.S. Department of Labor investigation discovered overtime and recordkeeping violations of the Fair Labor Standards Act (FLSA). The company operates a motel and restaurant.

The investigation, conducted by the department’s Wage and Hour Division’s district office in Pittsburgh, Pa., revealed that the company paid servers straight time in cash for hours worked in excess of 40 per week. The company failed to reimburse servers paid $2.13 per hour whose tips were found to be insufficient to yield the minimum wage. Servers were required to spend an entire shift running the cash register or being a hostess for $2.13 per hour without collecting tips to amount to minimum wage. Also, the company deducted a half-hour meal break from employee pay. However, all of these breaks were not taken duty free. Some employees worked off the clock and were not properly compensated. Therefore, time records maintained by the company did not reflect the accurate number of hours employees worked each week.

“Employees should receive the proper pay due to them,” said John DuMont, director of the Wage and Hour Division’s Pittsburgh District Office. “It is important that employers follow the law to determine the appropriate rate of pay.”

After the Wage and Hour Division explained the law’s requirements, the employer agreed to future compliance and agreed to pay all back wages.

The FLSA requires covered, nonexempt employees to be paid the federal minimum wage for all hours worked, and time and one-half their regular rates of pay for hours worked beyond 40 in a week. Employers must also maintain accurate time and payroll records. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the minimum hourly wage the employer must make up the difference.

The FLSA provides an exemption from both minimum wage and overtime pay for bona fide executive, administrative, professional and outside sales employees. To qualify, employees generally must meet certain job duty and salary tests. Information about the current exemption can be found on the Internet at www.dol.gov/fairpay.

Effective July 24, 2007, the federal minimum wage for covered, nonexempt employees is $5.85 per hour. The minimum wage will increase to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24, 2009. 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.

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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.