Wage and Hour Division (WHD)

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GALVESTON, Texas -- The U.S. Department of Labor’s Wage and Hour Division has recovered $109,722 for 49 wait staff employees of FGT Enterprise Inc., doing business as Salsa’s Mexican Restaurant on Seawall Boulevard in Galveston, after finding the company to be in violation of the minimum wage provisions of the Fair Labor Standards Act (FLSA).

“Employers must fully comply with the Department of Labor’s wage and hour regulations,” said Cynthia Watson, the Wage and Hour Division’s regional administrator for the Southwest. “In this case, the employer’s practice of ‘tip-pooling’ left workers paid below the minimum wage, which is illegal.”

The investigation covered a two-year period and determined that Salsa’s Mexican Restaurant failed to pay the minimum wage to tipped employees. Owner and operator FGT Enterprise cooperated with the investigation, and back wages have been paid in full.

Under the FLSA, tip-pooling is allowed but limited to employees who customarily and regularly receive more than $30 a month in tips. These employees may include waiters, waitresses, countermen, busboys and service bartenders. Managers are not eligible. Traditionally, restaurants consider tips as part of an employee’s wages, but they must pay at least $2.13 an hour in direct wages. If the combined wages fall below $5.85 an hour, the employer must make up the difference and bring the employee’s wages up to the minimum wage.

The FLSA also requires that covered employees be paid at least the federal minimum wage for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers must also maintain accurate time and payroll records.

The Labor Department’s Wage and Hour Division concluded 31,987 compliance actions and recovered more than $171 million in back wages for more than 246,000 employees in fiscal year 2006. Back-wage collections in fiscal year 2006 represent a 30 percent increase over back wages collected in fiscal year 2001. The number of workers receiving back wages has increased by 14 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) or contact the Wage and Hour Division’s Houston District Office at 713-339-5500. Information is also available on the Internet at www.wagehour.dol.gov.

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