Restaurant Franchise Overtime Violations - IHOP Franchises in NC and SC

DOL News Releases

Filed April 2nd, 2026

Detected April 3rd, 2026

Summary

The U.S. Department of Labor's Wage and Hour Division recovered $95,095 in back wages for 33 cooks at three IHOP franchise locations in North and South Carolina. The investigation found Foothills Hospitality LLC, Sandhill Hospitality LLC, and Highland Hospitality LLC violated overtime provisions of the Fair Labor Standards Act by paying straight time instead of time-and-a-half for hours exceeding 40 per week. The employers also falsified payroll records by listing overtime wages as bonuses.

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What changed

The Wage and Hour Division investigation found that three IHOP franchise operators in the Carolinas violated the Fair Labor Standards Act by paying cooks straight time for all hours worked instead of the required time-and-a-half premium for overtime hours. The employers—Foothills Hospitality LLC (Easley, SC), Sandhill Hospitality LLC (Southern Pines, NC), and Highland Hospitality LLC (Charlotte, NC)—also maintained payroll records that falsely characterized overtime payments as bonuses. The division recovered $95,095 in owed wages for 33 affected cooks.

Restaurant employers should review their pay practices to ensure compliance with federal overtime requirements. Any employer paying straight time for overtime hours, or misrepresenting overtime compensation in payroll records, faces significant liability. The Wage and Hour Division offers compliance assistance resources and the PAID program for self-reporting potential violations. Questions can be directed to 1-866-4US-WAGE.

What to do next

Review overtime pay practices to ensure time-and-a-half is paid for hours exceeding 40 per workweek
Ensure payroll records accurately reflect overtime compensation as such, not as bonuses
Use the DOL's compliance assistance toolkits to verify FLSA obligations

Penalties

$95,095 in back wages recovered for 33 workers; potential civil penalties for continued non-compliance

Source document (simplified)

News Release

US Department of Labor recovers $95K in owed wages for 33 cooks denied overtime pay at IHOP restaurants

COLUMBIA, SC – The U.S. Department of Labor has recovered $95,095 in back wages for 33 cooks at three IHOP franchise locations that failed to pay overtime – as federal law requires – at locations in both North and South Carolina.

The department’s Wage and Hour Division found a restaurant franchise based in Westend, North Carolina violated overtime provisions of the Fair Labor Standards Act at all three of its locations after it paid cooks straight time for all hours worked instead of the federally-mandated time-and-one-half their regular rate for hours worked in excess of 40 in a workweek. The employer – which operated all three establishments as IHOP restaurants – also maintained payroll records that falsely listed those wage payments as bonuses.

The division’s investigation found these overtime violations at Foothills Hospitality LLC in Easley, South Carolina, as well as Sandhill Hospitality LLC in Southern Pines and Highland Hospitality LLC in Charlotte, North Carolina.

“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,” said Wage and Hour Division Acting District Director Michael Gannet in Columbia, South Carolina. “The Wage and Hour Division offers assistance to help employers, regardless of the industry, understand their legal obligations.”

Employers and workers can contact the Wage and Hour Division with questions and requests for compliance assistance at its toll-free number, 1-866-4US-WAGE (487-9243). Employers are encouraged to use the agency’s industry-specific compliance assistance toolkits to learn about their responsibilities under the laws enforced by the division. The agency’s PAID program offers employers an opportunity to self-report and resolve potential minimum wage and overtime violations under the FLSA, as well as certain potential violations under the Family and Medical Leave Act.

Learn more about the Wage and Hour Division, including its search tool for workers to learn if they are owed back wages collected by the division. Download the agency’s free timesheet app for iOS and Android devices to track hours and pay.

Agency Wage and Hour Division Date April 2, 2026 Release Number 26-356-ATL Media Contact: Erika Ruthman Phone Number 678-237-0630 Email ruthman.erika.b@dol.gov Media Contact: OPA East Media Email OPA-East-Media@dol.gov Share This
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