Owner of two Metro East IHOP locations accused of wage theft

R&R RESTAURANT GROUP INC. is being sued under the Fair Labor Standards Act on accusations of failing to pay workers a minimum wage, confiscating their tips, directing managers to delete shifts in order to avoid paying overtime, and using federal minimum wages instead of Illinois’ higher wage to compute overtime.

By ELIZABETH DONALD
Illinois Correspondent

The owner of two IHOP restaurants in the Metro East is accused of violating federal law in wages and tips, according to a lawsuit filed by the U.S. Department of Labor.

R&R Restaurant Group Inc., owned by Khalid Ramadan, was sued under the Fair Labor Standards Act and accused of failing to pay workers a minimum wage, confiscating their tips, directing managers to delete shifts in order to avoid paying overtime, and using federal minimum wages instead of Illinois’ higher wage to compute overtime.

Nearly 180 employees are included in the suit, but others may be entitled to compensation, according to the suit.

NON-UNION CHAIN
IHOP is not a union chain, and it has had repeated issues with franchise owners failing to pay legally required wages before. In 2021, workers at an IHOP in Winston-Salem, N.C. walked out mid-shift because the franchise owners were paying employees late or not at all. The general manager had resorted to paying her staff out of pocket, but since she also wasn’t being paid, it didn’t last, according to The Progressive magazine.

Undocumented workers are particularly vulnerable, as they fear retaliation or deportation if they report wage theft and abuse.

ONE FAIR WAGE
One Fair Wage is a national organization seeking to end the sub-minimum wages earned by so-called “tipped workers.” Their Chicago campaign succeeded in establishing a full minimum wage with tips on top for the city, and are working on establishing it for the state at large.

According to One Fair Wage, 53 percent of restaurant workers are considering leaving the industry post-pandemic, and 78 percent said the only reason they would stay is if they received a livable wage with tips on top.

Illinois’ tipped wage is $6.60 an hour, and impacts approximately 333,000 people in Illinois, according to One Fair Wage. They currently do not have a campaign in Missouri, where the tipped wage is $6.15 per hour. Fifteen states pay the federal minimum of $2.13 an hour, including Tennessee, Indiana, Kansas, Texas, Georgia and Virginia.

The IHOP suit was filed June 11 in federal court. A similar suit was filed last month against the now-closed El Gordito restaurant in Belleville, Ill. whose owners are accused of keeping inaccurate and underreported records of workers’ hours, failing to pay the minimum wage and falsifying timesheets so paychecks would be close to zero. (See related story on this page.)

The U.S. Department of Labor’s Wage and Hour division recovered more than $29 million in back wages for workers in food service in fiscal year 2023, according to the department’s statement. For more information on federal employment laws and how to report wage theft, visit the U.S. Department of Labor’s website at https://www.dol.gov.


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