CHARLOTTE — The U.S. Department of Labor has recovered $95,095 in back wages for 33 cooks at three IHOP franchise locations in North and South Carolina.
The recovery follows a federal investigation that found the restaurants failed to pay legally required overtime rates, officials said.
Investigators with the department’s Wage and Hour Division determined that the franchise, based in Westend, violated the Fair Labor Standards Act at all three of its locations. The employer paid cooks straight time for all hours worked rather than the federally mandated time-and-a-half rate for hours exceeding 40 in a workweek.
The investigation identified violations at three specific entities: Foothills Hospitality LLC in Easley; Sandhill Hospitality LLC in Southern Pines; and Highland Hospitality LLC in Charlotte.
While the businesses operated under different LLC names, the Department of Labor identified them as part of a single franchise group based in Westend.
Beyond the failure to pay proper overtime rates, federal investigators said they found that the employer maintained inaccurate payroll records. The franchise reportedly attempted to hide the unpaid wages by falsely labeling the payments as bonuses in its internal documentation.
Michael Gannet serves as the Acting District Director for the Wage and Hour Division in Columbia. He said that these types of labor issues are frequent within the food service sector.
“Wage violations like these are all too common in the restaurant industry. Employers are encouraged to review their pay practices to ensure they pay workers in accordance with the law,” Gannet said. “The Wage and Hour Division offers assistance to help employers, regardless of the industry, understand their legal obligations.”
The Department of Labor provides several resources for business owners to maintain compliance, including industry-specific toolkits and a toll-free help line. It also manages the PAID program, which allows employers to self-report and resolve potential minimum wage or overtime violations under the Fair Labor Standards Act.
Workers who believe they may be owed back wages can use the Wage and Hour Division’s online search tool to check for collected funds.
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