Yes, Even Platinum Artists Need to Follow the FLSA
One musician’s family learned this lesson to the tune of over $100,000.
Boss Wings Enterprises LLC, the operator of five Wingstop franchise locations, was recently made to pay $114,427 in back wages and civil penalties. A Department of Labor investigation found that the operator, which is owned by mother and sister of rapper Rick Ross, had committed multiple violations under the Fair Labor Standards Act (FLSA).
These violations included:
- Paycheck deductions* which brought average hourly rates to below the federal minimum wage
- Paycheck deductions* which brought overtime compensation to below the federal overtime rate
- Failing to maintain a record of employee hours worked and wage deductions
- Allowing a 15-year-old employee to work later hours than the FLSA permits
*Deductions were charged for uniforms, safety trainings, background checks and cash register shortages.
StraightforWARD Legal Advice:
Employers may charge their employees for things like uniforms and cash register shortages ONLY IF these charges do not bring an employee’s compensation to below the federal minimum wage ($7.25) or the federal overtime rate (1.5x normal rate).
Paycheck deductions get even trickier for waiters and other tipped employees. Employers are only required to pay a minimum direct wage of $2.13 to tipped employees (provided employee’s tips make up the difference of the federal minimum wage). So, as long as employees are making over the minimum wage in tips, employers can make paycheck deductions? Not so fast! Under most circumstances, tipped employees must retain all of their tips. Because of this, any paycheck deduction would need to come from an employer’s direct wage ($2.13 in many cases). Similar to untipped employees, employers may not make paycheck deductions which bring direct wages to below $2.13.
Employers (even those with over 2 million album sales) should review their policies to ensure that they are adhering to both federal AND state overtime/minimum wage regulations.