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Chicago Restaurant Ordered to Pay Back Wages, Damages

Posted on in Pay Laws

Arlington Heights business law attorneysWhen you own and operate a business, it is crucial to remain in full compliance with all applicable laws and regulations. You are responsible for meeting government standards for licensing and certification, as well as safety and fire codes and a myriad of other requirements. One of the most controversial requirements—at least in recent years—has been compensation. If you employ a staff, it is your responsibility to pay them in accordance with federal, state, and local wage laws. Failing to do so could result in serious penalties, as one Chicago restaurant recently discovered.

Issues With “Training Rate”

The owner of popular Italian eatery Fabulous Freddies is on the proverbial hot seat following an investigation by the United States Department of Labor Wage and Hour Division. The investigation found that the restaurant and its owner failed to comply with the Fair Labor Standard Act (FLSA). According to several news reports, investigators from the Department of Labor found that Fabulous Freddies paid certain non-tipped workers a “training [pay] rate” of just $3.75 per hour—less than half of the $8.25 minimum wage in Illinois and still far below the $7.25 federal minimum wage.

Even worse, the eatery is located in Chicago’s Bridgeport neighborhood. As of July 1, 2017, the minimum wage is $10.00 per hour in Cook County and $11.00 per hour in the city of Chicago.  

Regulatory officials also say that the restaurant failed to pay overtime when employees exceeded 40 hours in a week and that the eatery’s recordkeeping practices were insufficient.

Noncompliance Can Cost Your Company

Reports indicate that under the terms of a consent decree between the DOL and Fabulous Freddies, the restaurant will be required to pay 58 employees a total $339,418 in unpaid back wages and damages. Thomas Gauza, Wage and Hour Division district director in Chicago, elaborated, "Failing to pay employees what they have legally earned allows companies to gain an unfair advantage over competitors that abide by the law. Wage violations can be avoided, and we encourage employers to reach out to us for guidance."

Call Us for Help

If you have questions about Illinois and federal labor laws, our law firm is here to help. For a consultation with one of our dedicated Cook County business law attorneys, contact our office today. We will work with you in creating a plan that keeps your company in full compliance with all applicable laws and guidelines. Call 847-749-4182 for an appointment.



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