Federal officials continued an investigation into a Beaufort Subway restaurant Thursday, amid allegations that overtime pay was denied to workers as young as 14 years old.
The U.S. Department of Labor confirmed Wednesday from its regional office in Atlanta a Fair Standards Labor Act investigation was launched against the Subway at 1706 Live Oak St.
A whistleblower alleged overtime payments were denied to employees under the age of 16, as well as intimidation from the restaurant's owner stretching back three years.
"When you find out that you're being cheated, and you try to go to [the owner] and say, 'look, I'm not being treated fairly' and he threatens to fire you ... that's not what should happen," the whistleblower said in an interview Thursday.
The restaurant's owner, Sam Rollings, said the federal investigation is baseless.
"They're false allegations," Rollings said in a phone interview. "There are really no findings to substantiate the allegations at this point."
In addition to overtime payment denials, the whistleblower with first-hand knowledge of the franchise's operations said young employees were illegally allowed to handle potentially dangerous meat slicing machines.
"I told the owner a child didn't need to be handling that equipment, it was against the law, they could get hurt," said the source. "[Rollings] said, 'they have a worker's permit, it's fine.'"
Rollings categorically denied that any dangerous practices take place in his Subway franchise.
"We don't have those machines," he said. "That's not true."
The owner said overtime issues surrounded a misunderstanding and investigators would not be able to find fault with his management. The source assisting the investigation said overtime pay was withheld to teenage employees until they worked more than 80 hours over two weeks.
Federal law states overtime pay must be provided to hourly employees who work more than 40 hours in a one-week period.
"I was told I had to work at least 80 hours before any of my overtime counted," the source said. "I just want the owner to be honest. There are good people working here who deserve to be treated fairly."
A spokesperson for the Department of Labor was not able to confirm specific aims or preliminary findings of the investigation. Labor officials in Raleigh said the work is being conducted on the federal level because the franchise is subject to federal labor laws when revenue exceeds $500,000.