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Arooga's restaurant chain settles over withholding wages
An investigation by the U.S. Department of Labor’s Wage and Hour Division revealed the owners of a Pennsylvania restaurant chain withheld pay from employees.
Arooga's Grille House and Sports Bar signed a settlement agreement with the department last year to pay current and former servers, cooks and assistant kitchen managers for unpaid overtime and minimum wages during a 30-month period.
“Employees depend on receiving the wages they have rightfully earned,” stated Alfonso Gristina, director of WHD's Wilkes-Barre district office, in a news release Thursday, April 26.
Arooga's will pay more than 1,000 employees from its York, Camp Hill, Lower Paxton, Mechanicsburg, Harrisburg and Hanover locations $375,003 total in back wages and an equal amount in liquidated damages, according to the release.
Early mistakes: When Arooga's was notified in early 2013 that the department would be investigating, changes were made that week, said franchise co-owner Gary Huether Jr. when reached Thursday.
Huether said there was no malicious intent behind the violations.
"As a young restaurant/company, we learned that we were doing some things incorrectly," he said.
The department looked into the company's previous three years of business, from 2010-2013. The sports bar franchise opened its first restaurant in Harrisburg July 26, 2008, and will be celebrating its 10-year anniversary this summer.
The important thing to remember, Huether said, is it's "not a fresh issue."
Though he said the franchise disagreed with many of the investigation's findings, they corrected them and have been in compliance ever since.
Arooga's came to a "negotiated amicable agreement" in 2014, he said, and signed the final settlement in January 2017.
"The Department of Labor concluded that Arooga’s did not intentionally violate any laws," the franchise noted in a statement it released in 2015.
Investigation: According to investigators, Arooga’s violated the Fair Labor Standards Act with the following actions, the release states.
Employers failed to pay tipped employees the federal minimum wage of $7.25 per hour after deductions for cash drawer shortages, walk outs and order mistakes.
They did not compensate servers for all the hours they worked — an estimated 65-70 hours per week — resulting in overtime violations, and withheld overtime pay from cooks who worked an estimated 65 hours per week.
The FLSA requires minimum wage pay for all covered, nonexempt employees, plus time-and-a-half regular rates — including commissions, bonuses and incentive pay — for all hours over 40 per week, according to the release.
Tipped employees must be paid no less than $2.13 an hour in direct wages, according to the act, as long as that amount plus tips equals the minimum wage. If it doesn't, employers must make up the difference, the release states.
Assistant kitchen managers at Arooga's were also not paid overtime because they were mistakenly categorized as exempt, according to investigators.
"We are hopeful that settlements like this one will call attention to such violations and remind other employers that they must comply with the law," said regional solicitor Oscar L. Hampton III.
More information about federal wage laws administered by the WHD can be found at the agency's toll-free helpline at 866-487-9243 or online through the Department of Labor.
Workers who have complaints can file them confidentially.
“We encourage all employers to make use of the many tools we provide to help them understand and comply with the law, and to call us for assistance," Gristina said.