Boise restaurants agree to pay back wages and penalties after federal minimum wage and overtime violations

The Fair Labor Standards Act (FLSA) is the main federal wage-and-hour law. It sets nationwide minimum standards that most restaurant employers must follow, including:

• Minimum wage: At least the federal minimum wage of $7.25 per hour for non‑exempt workers (or any higher state/local minimum). For tipped workers, employers may pay a lower cash wage but must ensure tips + cash reach at least the full minimum each workweek.
• Overtime: Non‑exempt workers must get at least 1.5 times their regular rate for all hours over 40 in a workweek.
• Youth labor rules: Limits on the kinds of jobs and hours minors can work.
• Recordkeeping: Employers must keep accurate time and pay records. Restaurant workers are generally covered and therefore entitled to these protections unless they fall into a narrow exemption (for example, certain salaried managers who meet strict tests).

A tip pool is an employer‑required system where tipped employees share tips with other eligible employees.

Under the FLSA:

• A “traditional” tip pool (when the employer takes a tip credit and pays less than $7.25 in cash) can only include workers who “customarily and regularly receive tips” (e.g., servers, bussers, bartenders). Managers and supervisors cannot receive tips from the pool.
• If the employer pays at least the full minimum wage in cash to everyone and does not take a tip credit, the pool can include some non‑tipped staff (e.g., dishwashers, cooks) but still cannot include managers or supervisors, and the employer itself cannot keep any part of the tips.

If managers or supervisors receive money from the tip pool, the employer is considered to be “keeping” employees’ tips, which violates the FLSA. When that happens, the employer loses the right to use the tip credit and must instead pay workers the full minimum wage in cash for all hours, plus return any improperly taken tips.

Under the FLSA, a violation is considered “willful” if the employer either knew its conduct was illegal or showed reckless disregard for whether it was legal. The U.S. Supreme Court adopted this standard in McLaughlin v. Richland Shoe Co.

Effects of a willful finding include:

• Longer recovery period: The statute of limitations for FLSA claims extends from 2 years to 3 years, allowing workers to recover an extra year of back wages.
• Higher civil money penalties: The Department of Labor can impose higher penalties for “repeated or willful” violations of minimum wage or overtime rules.

Simple mistakes or negligence generally are not enough; there must be evidence of knowing or reckless conduct.

For overtime, workers are either “non‑exempt” (overtime‑eligible) or “exempt” (not owed overtime) under the FLSA.

Non‑exempt:

• Most hourly workers and many salaried workers.
• Must be paid at least the minimum wage and overtime (1.5× regular rate) for hours over 40 in a workweek.

Exempt (white‑collar exemptions):

• To be exempt as an executive, administrative, professional, certain computer employee, or outside sales employee, a worker generally must:
  1. Be paid on a salary (or fee) basis at not less than $684 per week (current enforcement level), and
  2. Primarily perform specific kinds of higher‑level job duties listed in the regulations (for example, managing a department and supervising at least two full‑time employees for the executive exemption).
• Job titles alone do not determine exemption; actual duties and pay must meet all parts of the test.

If either the salary requirement or the duties test is not met, the worker is non‑exempt and must get overtime pay.

Restaurant workers who think they are not being paid correctly can:

1. Gather records: Keep copies or notes of work schedules, hours worked (including off‑the‑clock time), pay stubs, tip records, and any written policies about pay or tips.
2. Contact the U.S. Department of Labor (Wage and Hour Division):
   • Call the toll‑free helpline: 1‑866‑4US‑WAGE (1‑866‑487‑9243).
   • File a confidential complaint online or through a local WHD office; your name and complaint details are kept confidential from your employer.
3. Use worker.gov and DOL tools to learn your rights and check whether your pay seems correct.
4. Consider state options: Many states (including Idaho) have their own labor agencies or wage‑claim processes in addition to federal enforcement.

Workers are protected from retaliation for asking about their pay, filing a complaint, or cooperating with a DOL investigation.

The Department of Labor’s Payroll Audit Independent Determination (PAID) program is a voluntary self‑audit program run by the Wage and Hour Division.

How it operates for employers:

• Employers review their own pay practices, identify potential FLSA minimum wage, overtime, or (now) certain FMLA leave violations, and calculate the back wages owed.
• They then submit this information to WHD through the PAID process.
• If WHD accepts the submission, it reviews the employer’s calculations, supervises payment of the back wages to affected workers, and generally resolves those specific issues without litigation or liquidated (double) damages, as long as employers cooperate and pay in full.
• Workers remain free to decline the settlement and pursue private lawsuits if they choose.

The program was first launched in 2018, ended in 2021, and has been relaunched and expanded (as of 2025) to also cover certain FMLA violations.