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7 Ann Arbor restaurants owe back wages after labor dept. investigation

Jun 15, 2015

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Seven Ann Arbor restaurants must pay more than 100 employees over $145,000 in back wages.

That’s after a U.S. Department of Labor investigation into the city’s restaurant industry revealed a host of violations.

The department’s Wages and Hours division is investigating compliance with the Fair Labor Standards Act in several Midwestern college towns.

According to an agency statement, violations in Ann Arbor included failing to pay eligible employees overtime; improperly categorizing and paying some employees as “tipped workers,” resulting in pay less than the minimum wage; and failing to maintain accurate records of wages and hours worked.

“By illegally underpaying these people, employers cheated already low-paid workers and their families out of their hard-earned income. That is unacceptable,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “Unfortunately, labor violations like these are common in the restaurant and hotel industry.”

Alicia Farris, director of the non-profit Restaurant Opportunities Center of Michigan, agrees that many restaurant employees face similar workplace issues. “And often they don’t want to come forward, because they’re concerned about being blacklisted and fired,” she says.

But Farris says many in the restaurant industry simply don’t know about wage and hour requirements, and her group will work with the federal government to better educate employers.

“We think that a lot of this is often done out of ignorance [and] restaurants not being familiar with the law,” Farris says.

According to the Department of Labor, investigators found violations in Ann Arbor at Tomukun Korean Barbeque; Holiday’s Restaurant; La Marsa Mediterranean Cuisine; Ahmo’s Gyros & Deli; Uptown Coney Island; Uptown/Main Street Coney Island & Restaurant; and Gourmet Garden.

In addition to paying back wages, the restaurants’ owners have agreed to comply with labor laws in the future.