United States Department of Labor

Wage and Hour Division (WHD)

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SAN FRANCISCO -- The U.S. Department of Labor’s Wage and Hour Division is launching an enforcement and education initiative focused on the restaurant industry in the Greater San Francisco metropolitan area to combat widespread violations of the minimum wage, overtime, record-keeping and child labor provisions of the federal Fair Labor Standards Act.

“Our current enforcement efforts in San Francisco’s restaurant industry reveal an alarming culture of FLSA violations,” said Susana Rincon, director of the Wage and Hour Division’s San Francisco District Office. “For a variety of reasons, including the fear of losing their jobs, vulnerable restaurant employees are reluctant to step forward to complain when subjected to wage violations. Employers can take advantage of these fears, and employees end up victims of numerous types of wage and other labor violations. As part of this initiative, investigators will be making unannounced visits to restaurants throughout the area to conduct investigations, remedy widespread labor violations, and ensure that law-abiding employers who pay their workers full and fair wages are not placed at a competitive disadvantage by those who break the rules.”

From 2006 through 2011, the division’s San Francisco office conducted more than 500 restaurant investigations and identified FLSA violations at 68 percent of the restaurants. Those violations resulted in more than $2.1 million in minimum and overtime back wages owed to nearly 2,500 employees. During the same period, the division conducted more than 1,800 investigations of restaurants along the West Coast and found that 71 percent were violating the FLSA, resulting in more than $12 million in back wages owed to more than 9,500 employees.

Thin profit margins – particularly at low-cost, ethnic food establishments – serve as incentive for some area employers to keep labor costs low using illegal tactics. Common violations include not paying for all hours worked, having employees perform work duties “off the clock” and incorrectly designating employees as exempt from overtime. Other violations include paying nonexempt employees a flat salary regardless of any overtime hours worked, as well as paying cash wages completely “off the books,” which can lead not only to employees being cheated out of proper minimum wage and overtime compensation but also to tax liabilities. Illegal deductions from workers’ wages for uniforms, breakages, customer walk-outs (instances of people leaving without paying for meals) and cash register shortages also are common. Additionally, child labor violations found during previous investigations include allowing minors to operate hazardous equipment such as dough mixers and meat slicers.

Investigators will pursue corrective action when violations are found, including the collection and payment of back wages, the assessment of civil money penalties and liquidated damages, and possible litigation. Information on establishments investigated will be included in the division’s enforcement database, which can be viewed online at http://ogesdw.dol.gov and is also accessible via the “Eat Shop Sleep” smartphone application, which can be found on the Labor Department’s app Web page, http://www.dol.gov/dol/apps/winners.htm. Consumers, employees and other members of the public can use the app to learn if a restaurant, hotel or retail establishment has been investigated by the division and whether FLSA violations were found. Businesses will have a greater incentive to comply with the law now that their compliance track records are publicly available.

The initiative also will bring together key worker advocacy and employer associations to help share FLSA compliance assistance information with workers and employers, and to secure their cooperation in promoting industrywide compliance and accountability. Additionally, to help employers determine whether they are in compliance with child labor provisions, the division offers the Restaurant Employer Self-Assessment Tool, a confidential, online survey accessible at http://www.youthrules.dol.gov/selfassess_restaurant.htm.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. An employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee’s tips combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees with notice of the FLSA tip credit provisions and to maintain accurate time and payroll records, as well as to comply with the restrictions on hours and hazardous occupations applying to workers under age 18.

For more information about the FLSA, call the Wage and Hour Division’s national toll-free helpline at 866-4US-WAGE (487-9243) or its San Francisco office at 415-625-7720. Information also is available at http://www.dol.gov/whd.

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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.