Wage & Hour Division Has Conducted More Than 25,000 Investigations of Food Service Establishments Nationwide
According to a recent U.S. Department of Labor news release, the Wage and Hour Division (WHD) has conducted more than 25,000 investigations of food service establishments since 2016. These investigations have resulted in the recovery of over $195 million in back wages for more than 195,000 workers across the United States.
This enforcement activity makes the food service industry one of the highest-risk sectors for wage and hour violations nationwide.
What These Numbers Mean for Restaurant Owners
The volume of WHD investigations makes one thing clear:
📌 Restaurants are one of the top enforcement targets for federal labor investigators.
WHD focuses heavily on food service establishments because:
Tip credit and tip pooling rules are widely misunderstood
Overtime violations are extremely common
High turnover creates payroll and documentation errors
Managers often lack formal compliance training
Dual job duties (tipped vs. non-tipped) cause widespread mistakes
Restaurants frequently misclassify employees or miscalculate wages
Even restaurants with “good intentions” are often out of compliance without realizing it.
Key Reasons Why Restaurants Are Investigated
Based on WHD reports, the most frequent violations discovered include:
1. Invalid Tip Pools
Including kitchen staff, supervisors, or other non-tipped workers in tip pools.
2. Improper Use of the Tip Credit
Failing to provide employees with written tip credit notice or applying the tip credit incorrectly.
3. Overtime Violations
Paying the tipped cash wage for overtime or failing to calculate overtime based on full minimum wage.
4. Off-the-Clock Work
Employees cleaning, preparing, or setting up before or after recorded hours.
5. Recordkeeping Failures
Incomplete onboarding records, missing timecards, and inaccurate payroll documentation.
6. Misclassification of Employees
Paying cooks or shift leads a salary instead of hourly overtime-eligible wages.
Each of these can result in thousands—or even hundreds of thousands—of dollars in back wages and penalties.
$195 Million Recovered — A Warning to the Industry
Recovering $195,000,000 for food service workers since 2016 sends a clear message:
👉 Wage and hour compliance is no longer optional — it is a federal priority.
Restaurants nationwide have been forced to pay:
Back wages for unpaid overtime
Repaid tips due to invalid pools
Liquidated damages
Civil money penalties
Attorney fees in private lawsuits
Additional compliance monitoring
For many small and mid-size restaurants, these costs are devastating.
Why This Case Should Concern Every Restaurant Owner
The scale of federal enforcement means:
No restaurant is “too small” to be investigated
WHD routinely visits restaurants without complaints
The majority of restaurants have at least one violation
Employees now understand their rights better than ever
Law firms aggressively pursue restaurant wage theft cases
If a restaurant is not proactively reviewing compliance, risk is almost guaranteed.
How Restaurants Can Reduce Their Risk
Restaurant owners can protect themselves by taking steps including:
Conducting a wage & hour compliance audit
Ensuring tip pools meet all FLSA requirements
Reviewing tip credit documentation
Verifying overtime calculations for tipped and non-tipped workers
Ensuring managers understand wage laws
Maintaining complete onboarding and payroll documentation
Tracking tipped vs. non-tipped duties accurately
The cost of preventive compliance is far lower than the cost of a federal investigation.
To understand how these violations happen and how to prevent them, read our Ultimate Guide to Wage & Hour Compliance for Restaurants.”
Protect Your Restaurant Before a Federal Investigation Happens
More than 25,000 restaurants have already been investigated — many without a single complaint.
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Find out where your restaurant may be exposed — and what you can do about it.