Wage and Hour Division (WHD)

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HOUSTON -- Luby’s Restaurants LP of Houston, Texas, has agreed to pay $366,864 in back wages to 1,680 current and former wait staff, cashiers and checkers after a U.S. Department of Labor investigation found the employees had not been properly paid as required by the Fair Labor Standards Act (FLSA).

“The Department of Labor is committed to enforcing the law to ensure that employees receive the wages they have rightfully earned,” said Cynthia Watson, Wage and Hour southwest regional administrator. “In this case, the employer’s practice of ‘tip-pooling’ left workers paid below the minimum wage. This is illegal.”

An investigation by the department’s Wage and Hour Division, covering the period Feb. 24, 2003 to Nov. 8, 2005, determined that Luby’s Restaurants located in Houston and San Antonio, Texas, as well as Albuquerque, N.M. and New Orleans, La., failed to pay employees time-and-one-half for hours worked in excess of 40 per week.

Under the Fair Labor Standards Act (FLSA) tip splitting or tip-pooling is allowed but limited to employees who customarily and regularly receive more than $30 a month in tips. This would include waiters, waitresses, countermen, busboys and service bartenders. Managers, however, are not eligible to participate in tip- pooling.

The FLSA requires employees to be paid the federal minimum wage for all hours worked and, unless exempt, time-and-one-half their regular rate of pay for hours worked over 40 per week. Employers must also maintain accurate time and payroll records.

Luby’s Restaurants LP, doing business as Luby’s, has agreed to future compliance with the FLSA. All back wages have been in full.

For more information about the FLSA, call the DOL’s toll-free help line at 1 (866) 4US-WAGE (487-9243) or contact the Wage and Hour Division’s district office in Houston at (713) 339-5500. Information is also available on the Internet at www.wagehour.dol.gov.

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