I have been in situations similar to this on both sides. The first was little over ten years ago when I worked for a franchaisee of a major Pizza Chain who hired 14 year olds. Someone, we didn’t know who called the DOL about the time card issue just before I started there. An audit team showed up at our Corporate Offices with a warrant. The company that I worked for had about 30 locations. By the time the audit team had finished with just the previous calender year, I was told that they had found over 2,000 timecard violations. At the end of everything, the company paid a $25,000 fine and we were no longer hiring 14 year olds. Almost all of the violations were the kids clocking out at 7:05 or 7:10 when they had school the next day.
The second was when I was a differnt Pizza company and this had to do with our payday. The company used a payroll processing company to print our paychecks. When they printed them, they put the date printed as the date on the check and then mailed them out to the restaurants where they sat in the safe for 2 to 3 days until the Friday payday. The story goes that one of the employees found out that it is a matter of law that the check becomes the property of who it is made out to on the date of the check and called the DOL when he wanted his check. I am not sure if the story is true, but less then a month after I heard this through the company grapevine, the checks were being printed with the actual paydays date. And the payday before that my manager gave out the checks as soon as he received them.
I thought that that the government was being a little overbearing in these two cases until I had to look at the situation from the other side. After a work injury where I had to get out of the restaurant business, I went to work at a call center. We had to be there at least 15 minutes before our shift was scheduled to start in order to bring up all of our systems so that we could take our first call at our shift start time. Needless to say, this was a sore spot between the employees and management. After several years of this practice, the DOL called my employer on it. In the end every effected employee received back pay for this time. It averaged $500.00 for each year with the company. The company had to pay out around $20 million. I certainly enjoyed the extra $1500 dollars.
A couple of other thoughts that I would share with you, remember that your tipped employees have to make minimum wage each shift with declared tips. If it has been a very slow night for some reason and they don’t have it, you have to pay the difference. The other thing is that the IRS is now holding restaurant management responsible if employees underreport their tip income.