SALEM — The owner of an Upper Crust franchise in Salem has agreed to pay 11 employees more than $80,000 in back wages and damages to settle allegations that he violated federal wage laws, the Department of Labor said yesterday.
Buchhalter Ltd. and owner and general manager Michael Buchhalter were found to be violating overtime and record-keeping requirements of the Fair Labor Standards Act by improperly classifying kitchen employees as exempt from overtime requirements, the federal agency said in a release.
The workers were paid in "straight time wages" rather than at time and a half for overtime work, and were not paid for all of the hours they worked, Department of Labor spokesman John Chavez said.
Investigators found that the company also failed to maintain accurate records of the hours worked by employees.
Buchhalter has agreed to pay $40,277 in unpaid overtime and back wages to the 11 employees, plus an additional $40,277 in what were described as "liquidated damages," a type of civil penalty, to settle the case short of a lawsuit.
Buchhalter has also signed an agreement that he will fully comply with all requirements of the Fair Labor Standards Act in the future.
The company is in the process of paying the workers the money they are owed and has a month to submit proof that the payments have been made, Chavez said.
The violations occurred over a more than two-year period, between January 2009 and this past April.
And they occurred after a separate investigation, which revealed similar violations at 10 Upper Crust restaurants in Boston and other areas, was publicized. That investigation found that 121 employees were not being paid overtime; the owner, Upper Crust LLC, was ordered to pay $341,545 in back wages in that case.
Subsequently, allegations were raised in a lawsuit last year that the owner of those restaurants, Jordan Tobins, was taking back the payments he'd made to workers, allegations he disputes.
The workers affected in the Boston case were primarily undocumented immigrants from Brazil.
Chavez said yesterday that he does not know the immigration status of the workers at the Salem restaurant, but said that regardless of someone's status in the country, "an employer is obligated to pay them properly for the hours they worked."
The Department of Labor Wage and Hour Division has targeted restaurants that may be exploiting workers who fear deportation if they complain to officials, Chavez said.
"The Labor Department will not allow employers like The Upper Crust Pizzeria to violate the law and deprive vulnerable, low-wage restaurant workers of their rightful wages," said Carlos Matos, assistant director for the Boston district office of the Wage and Hour Division. "Requiring violators to pay liquidated damages in addition to the back wages owed ensures accountability under the law and also helps level the playing field for those employers who play by the rules and pay their workers fair wages."
Buchhalter opened an independently owned franchise in Salem after serving as general manager of the chain's shop on Newbury Street in Boston, he said in an interview with The Salem News at the time.
Buchhalter, under a separate corporate entity, recently opened another Upper Crust franchise in North Beverly. Both locations have beer and wine licenses.
Last year, he received a $275,000 small business loan funded with federal stimulus money, according to the Small Business Administration's website.
Buchhalter did not return messages left at his Salem restaurant and at his Marblehead home.
A person answering the phone at the Salem shop said Buchhalter had just left "on holiday" and was not available.
Courts reporter Julie Manganis may be reached at 978-338-2521 or jmanganis@salemnews.com.
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