Living in Alabama, you may not have heard of Houlihan's, a Kansas-based American casual restaurant. But, after its current legal woes, it may become a household name, though not for good reason. Houlihan's has been accused by its employees of engaging in "pervasive skimming from employees' tips and wages." In other words, the federal lawsuit that was recently filed claims that Houlihan's is guilty of wage theft.
The minimum wage allegations against Houlihan's
According to the lawsuit, Houlihan's has violated the Fair Labor Standards Act in several ways, including the provisions on minimum wage, overtime and recordkeeping. For instance, it has been asserted that the restaurant required servers and bartenders to contribute a percentage of their tips to a tip pool, while paying those tips to custodial and kitchen workers, which violates the minimum wage requirements for tipped employees They also allegedly retained a portion of employee tips for the business itself.
Alleged overtime allegations against Houlihan's
It was also alleged that Houlihan's refused to pay overtime to employees who worked at more than one restaurant, when their combined hours totaled more than 40 hours a week. They were accused of requiring employees to work off-the-clock, only earning tips. They allegedly had a routine practice of deducting money from their employees' paychecks for consuming restaurant food during breaks, but also requiring payment for those meals. This particular practice was illegal for more than one reason. Not only did the deductions that were taken from their employees' pay cost more than the restaurant's actual cost for providing the meal, but it also resulted in some employees being paid less than minimum wage.
Possible results of the lawsuit
The suit has been brought on behalf of approximately 1,430 current and former Houlihan's employees. If the employees are successful in their federal suit, the employees could potentially recover millions in back wages, tips and liquidated damages. That is because, according to the Department of Labor, these violations are so severe and the number of affected workers is so large. Unfortunately, restaurant workers are often the most vulnerable when it comes to wage violations.
The effect of FLSA violations and wage theft on the economy in general
Another effect these types of violations have, is on the economy in general. When businesses attempt to reduce their labor costs by shorting workers, they inevitably put law-abiding restaurants at a competitive disadvantage, thereby violating the principles of a fair, which are protected by the FLSA.
If you feel you have been the victim of wage theft, or if you have any questions regarding your employment rights, please contact the experienced employment attorneys at Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.