IHOP: Good Breakfast But Illegal Wage Practices?

On January 2, 2014, the United States District Court for the Eastern District of Missouri denied both the plaintiff’s and defendant’s motions for summary judgment in the case Gonzalez v. Sara, Inc., d/b/a IHOP #5328. Plaintiff Enrique Gonzalez originally filed a lawsuit against his former employer seeking to recover unpaid overtime wages under the federal Fair Labor Standards Act (FLSA). The FLSA establishes minimum wage and overtime standards for covered employers and employees. Specifically, the FLSA establishes a federal minimum wage of $7.30 per hour and requires a minimum of “time-and-a-half” for hours worked over forty per workweek.

Gonzalez began working at the International House of Pancakes (“IHOP”) located in St. Peters, Missouri in 2008 as a line cook. At the start of his employment, Gonzalez earned $10 dollars per hour. His employer subsequently changed his rate of pay to $550 per week. That amount then grew to $670 per week. Although Gonzalez reported working sixty to sixty-five hours per week, Gonzalez’s employer failed to compensate him for overtime hours.

Among other issues, the court addressed how overtime pay should be calculated for employees who are paid on a weekly (instead of an hourly) basis. In doing so, a calculation must be made to determine the employee’s “regular rate of pay.” Department of Labor regulations make clear that if an employee is employed solely on a weekly salary basis, the regular hourly “rate of pay” is computed by dividing that salary by the number of hours that the salary is intended to compensate.

As such, an employee earning $500 per week for the first forty hours worked would be considered to have a rate of pay of $12.50 per hour. Any overtime hours worked would then be paid at a rate of time-and-a-half (i.e., $18.75 per hour). In this case, the court concluded that summary judgment was inappropriate on this issue as it was unclear whether Gonzalez did, in fact, work on an hourly basis. Gonzalez reported that he also received under-the-table compensation on a weekly basis and a number of bonuses.

If you believe that you have not received overtime wages, then please don’t hesitate to contact Riggan Law Firm, LLC and discuss your case.