The owner of 15 Houlihan's restaurants across the state has agreed to pay $5 million in back wages and damages to more than 1,000 workers after allegedly denying overtime pay and forcing workers to pay twice for shift meals.

The US Department of Labor announced the agreement Monday following a lawsuit against two companies -- one in New Jersey and another in New York -- that are owned by Arnold Runestad of Bergen County.

The restaurants were accused by the Department of Labor in 2015 of violating the Fair Labor Standards Act.

"In sum, defendants' pervasive skimming from tips and wages flouted the law and deprived defendants' employees of money they earned," according to the suit.

The New Jersey restaurants include locations in Bayonne, Brick, Bridgewater, Cherry Hill, Eatontown, Fairfield, Hasbrouck Heights, Holmdel, Lawrenceville, Metuchen/Woodbridge, New Brunswick, Paramus, Ramsey, Secaucus and Weehawken, according to the labor department.

Their parent company, A.C.E. Restaurant Group, is based in Saddle Brook, while another company owned by Runestad operates two Houlihan's in New York.

Between the 17 locations, there are 1,471 current and former employees affected, according to officials.

A labor department investigation found that the restaurants denied overtime pay to those who worked more than 40 hours a week at multiple restaurants, and included employees not reliant on tips in a mandatory tip pool, cutting back the earnings of employees making less than minimum wage.

The restaurants additionally retained portions of tips and withheld money from employees' paychecks to cover meals, but subsequently made them pay for meals during shifts, officials said.

The company denied the claims and fought back against them in 2016.

The fines stem from a consent judgment filed Monday, which is pending approval by the federal district court in Camden. In addition to the fines, Runestad agreed to follow minimum wage, overtime and record keeping rules, and to notify employees of their rights.

In an emailed statement, Runestad said each of the franchises' employees is "part of our family."

"This is a relationship we would never take for granted and one that we truly believe was never compromised. We are deeply sorry for any distraction this situation caused to our employees or our restaurants over the past [six] years."



"While this case could have gone on for years as we debated the various points, it was the right business decision to reach an agreement with the Department of Labor," he added.

An email sent to Houlihan's corporate was not returned.

This story has been updated to include comment from A.C.E. Restaurant Group.

Amanda Hoover can be reached at ahoover@njadvancemedia.com. Follow her on Twitter @amandahoovernj. Find NJ.com on Facebook.

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