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ESA-WHD New Release: [02/18/1997]
Contact Name: DAN FUQUA OR LORETTE DEMPSEY
Phone Number: (404) 562-2078 or x2076
Release Number: USDL: 97-22
ATLANTA AREA RESTAURANT CHAIN OPERATOR TO PAY OVER $2 MILLION IN SETTLEMENT WITH U.S. LABOR DEPARTMENT
ATLANTA — Collis Foods, Inc., franchise operator of Waffle House restaurants in four Southern states, will pay more than $2 million as part of an agreement with the U.S. Labor Department. The agreement settles all but one issue in a case involving minimum wage and overtime pay violations of the Fair Labor Standards Act (FLSA).
The Alpharetta, Ga., firm operates a chain of approximately 60 Waffle House restaurants. The majority of the restaurants, which are open 24 hours a day, every day of the year, are located in Tennessee, with others in Georgia, Mississippi and Arkansas.
Under the terms of the settlement, Collis Foods has agreed to pay $1.3 million in back wages to 3,793 employees and an additional $853,000 in civil money penalties. The backpay reimburses workers for an average of 17 minutes per shift of off-the-clock work which was uncompensated from June 28, 1991 to March 29, 1995.
"Businesses have the obligation to pay their workers fairly, and it is our job to see that companies meet their obligations," said Bernard E. Anderson, head of the Employment Standards Administration (ESA). ESA is the agency within the Labor Department that oversees wage and hour laws. Its Wage and Hour Division is focusing its resources on improving compliance in low-wage industries such as agriculture, garment, restaurants, and guard and janitorial services.
Also included in back pay computations were deductions from pay for shortages, customer walkouts, mathematical errors, breakages, and similar situations. The deductions either lowered hourly pay below the federal minimum wage or reduced overtime pay below the level required by the FLSA.
Much of the back pay was calculated based on employee depositions because the employer failed to maintain adequate records of hours worked or cash deductions and payments taken from employees’ pay.
Remaining for resolution is the Labor Department’s contention that Collis Foods deducted excessive meal credits from wages. This issue, along with back pay due, is pending future court action.
According to Alfred H. Perry, the department’s regional administrator for wage and hour, Atlanta, Collis Foods has a history of FLSA violations. "In November 1979, a judgment entered in federal district court enjoined the company from violating many of the same provisions of the act which are the subject of this case."
"We are pleased that we have been able to settle a major portion of the allegations in this case," said Perry. "This will allow prompt payment of back wages to a large number of hourly workers who, because they were not paid for all hours worked or were subjected to unlawful deductions, failed to receive even the minimum amount due for their labor."
Perry added that, "The underpayments in this case are particu-larly egregious because these employees are low-wage workers to begin with."
In addition to payment of back wages, the company agreed to entry of an injunction, prohibiting future violations of the FLSA. The defendant is also beginning an extensive in-house educational and disciplinary program for its employees and managers to prevent future off-the-clock and other wage-related problems. A random, semi-annual outside audit will also be conducted at the employer’s expense to identify and resolve any problems that may occur.
Enforced by the Labor Department's Wage and Hour Division, the FLSA sets the basic current federal minimum wage at $4.75 an hour and generally calls for overtime pay for hours worked over 40 in any workweek.
Additionally, the act requires employers to keep specified time and payroll records and sets out, by age groups, the types of jobs minors can hold, along with the hours during which they may work.
The settlement agreement followed investigations by the Wage and Hour Division located at 1321 Murfreesboro Rd., Suite 511, Nashville, Tenn. 37217-2648; telephone: 615/781-5345.
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