Porky’s Bayside Pays Employees More than $73K for Unpaid Overtime

According to the Economic Policy Institute, restaurant employees typically have “very low-wage jobs with few benefits, and many restaurant workers live in poverty or near-poverty.” Many restaurant employees desperately need their jobs because they cannot find other employment. Sadly, some restaurant owners take advantage of their employees’ circumstances by depriving them of the wage and hour protections that federal laws safeguard.

A recent example of wage and hour violations in the restaurant industry was reported in the Miami Herald. The owners of Porky’s Bayside Restaurant and Marina in Marathon employed 35 workers at an hourly rate.

Restaurant management required those employees to work more than 40 hours during their workweek. The restaurant paid the employees for their extra hours at their regular, “straight-time” hourly rate instead of paying the time-and-a-half overtime rate required by federal law.

A U.S. Department of Labor investigation resulted in the payment of back wages to 35 Porky’s Bayside employees of $73,626. Unfortunately, Porky’s violation of wage and hour laws is all too common in the restaurant industry.

Porky’s Independent Contractor Ruse

The owners of Porky’s Bayside tried to circumvent the law by misclassifying some of the restaurants employees as independent contractors. The ruse was transparent. An independent contractor is self-employed and usually provides services other than those that are an integral part of the business for which the independent contractor is working.

Independent contractors usually work for many different customers. They make an agreement with the customer about when the work will be done. They typically work without close supervision.

For example, a self-employed plumber who is called to a restaurant to fix clogged pipes in the kitchen is an independent contractor. The plumber can charge by the hour, but the restaurant does not need to pay the plumber overtime or comply with other labor laws because the plumber is not an employee.

However, when a worker performs the kind of tasks that are integral to the operation of a restaurant — washing dishes, bussing tables, mixing drinks, or taking orders and serving food — the worker must usually be classified as an employee. Restaurant employees work on a schedule fixed by the restaurant and are closely supervised.

By misclassifying its employees as independent contractors, Porky’s Bayside tried to evade laws that assure employees receive fair wages. In addition to requiring payment of minimum wage and overtime, federal and state laws require employers to pay a share of the employee’s FICA taxes, to provide workers’ compensation coverage, and to provide unemployment compensation. Employees suffer when they are misclassified as independent contractors.

Porky’s Excuse

Porky’s Bayside paid some wages in cash, a common practice that helps employers avoid contributing to FICA. But Porky’s did not pay the premium overtime wage that federal law requires. Porky’s also violated the law by failing to keep a record of the cash wage payments.

A co-owner of Porky’s Bayside, Sean Johnson, attempted to justify the restaurant’s unlawful behavior by claiming that the employees wanted to do extra work for Porky’s instead of looking for a second job. The self-serving suggestion that Porky’s was doing a favor for its employees ignores the fact that its employees had a legal right to overtime compensation that Porky’s simply refused to pay.

Johnson claimed that his workers “understand I can’t pay $20 an hour in overtime” and remain in business. Of course, if Porky’s Bayside did not want to pay overtime, it could have scheduled its employees to work 40-hour weeks and hired additional employees to perform additional work at regular hourly wages. One reason Congress enacted overtime laws was the belief that the economy benefits when businesses employ more workers rather than making their existing employees work longer hours.

A Widespread Problem

As the Department of Labor pointed out, businesses gain an advantage over their competition when they cheat their employees by failing to pay a premium overtime wage. Businesses that obey the law suffer when competitors are able to operate their businesses at a lower cost because they aren’t paying fair wages.

Sean Johnson told the Miami Herald that “a good majority of restaurants” commit the same kind of wage violations. Whether or not a majority of restaurants are dishonest, it is clear that a substantial part of the restaurant industry routinely violates wage and hour laws. In addition to misclassifying employees and failing to pay premium overtime wages, some restaurants violate the law by requiring employees to work for “tips only” rather than paying minimum wage.

The Department of Labor has limited resources. It cannot investigate every restaurant. Fortunately, the Fair Labor Standards Act (FLSA) allows employees to bring their own wage claims. The FLSA also requires employers to pay the attorney’s fees of employees who make successful claims for back wages. That makes it easier for employees to obtain representation when they have been misclassified or simply denied payment of the full wages to which they are lawfully entitled.

If you work for a restaurant that classified you as an independent contractor or that failed to pay you a premium overtime wage when you worked more than 40 hours per week, or if you work for “tips only”, you may be entitled to back wages. Federal law prohibits retaliation against employees who make wage claims. Contact an experienced Florida wage and hour lawyer at Robert S. Norell, P.A. to learn how your rights can be protected. At Robert S. Norell, P.A., we help workers recover their wages and will also help workers who have been retaliated against by their employer after requesting to be paid properly.

If you are an employer and you have been paying your employees improperly, call Robert S. Norell, P.A. to schedule a consultation. We can help businesses clean up their pay problems and ensure future compliance with the FLSA.