Dive Brief:
- Former employees of Tacombi, a Mexican restaurant in New York City owned by La Cornelia LLC, filed a collective action against the company May 15 alleging "bad faith" violations of the Fair Labor Standards Act (FLSA) and state law (Armenta, et al. v. La Cornelia LLC, 1:20-cv-03767 (S.D.N.Y. May 15, 2020)).
- The plaintiffs, who worked as porters, claimed they weren't paid for all hours worked, resulting in their pay rate falling below the required minimum wage rate and overtime violations. They also alleged the employer adjusted pay stubs to reflect inaccurate wages and hours worked, willfully evading the laws' notice and recordkeeping requirements.
- The suit seeks back pay and an equal amount in damages.
Dive Insight:
Employers are obligated to keep track of workers' hours who receive minimum wage and pay them accordingly, including if excess hours result in overtime, according to federal law.
The FLSA creates the right to a minimum wage, and time-and-a-half overtime pay when employees work more than 40 hours a week. However, it provides exemptions from this rule if employees pass a salary threshold and meet a duties test. The law also sets out strict recordkeeping requirements.
Notably, as the Armenta plaintiffs alleged, employers may be subject to liquidated (double) damages if violations are deemed willful. FLSA claims also tend to lend themselves to collective action, as employers' pay policies often are standardized. Experts say that's why bad faith wage and hour violations can add up quickly — and why such suits are a top concern for employers.
In addition, New York employers are subject to special notice requirements. The law requires employers to give written notice of wage rates to each new hire, according to the New York State Department of Labor. The notice must include rate of pay, including overtime rate of pay (if it applies); how the employee will be paid, such as by the hour; the official name, address and phone number of the employer; and allowances taken as part of the minimum wage.
