DOL Sues Restaurant for Back Wages Owed to Low-Wage Employees

The U.S. Department of Labor has filed a lawsuit against restaurant company Arriaga Inc., which operates the restaurant Señor Pancho’s, alleging that the Orville, Ohio, restaurant owes more than $272,000 in unpaid wages to 34 employees.

The restaurant wage lawsuit was sparked by an investigation by the Wage & Hour Division of the Department of Labor, which found evidence of violations of overtime, minimum wage, and record keeping provisions. The DOL’s lawsuit also seeks liquidated damages for the employees, and asks the court to permanently keep the defendants from committing future violations of the Fair Labor Standards Act (FLSA).

The investigation found that tipped employees, such as servers, had to essentially rely on tips from the customer for their pay. The restaurant also did not keep adequate records of the employees’ hours, and did not pay any of these employees overtime, according to the agency. In a total week’s pay, some employees made less than $7.25 a week. 

Some of the kitchen staff employees were spared this treatment by being paid on a salary basis, and avoided the minimum wage problem. Additionally, many employees were improperly classified as exempt from overtime and either did not receive paychecks or had their paychecks bounce due to insufficient funds. The restaurant also kept inadequate payroll records of these employees, not even dating back a year, according to the DOL.

Under federal law, the FLSA requires that typical, covered employees be paid at least a minimum of $7.25 per hour. This must be for all hours worked, plus time and one-half regular rates, which includes commissions, bonuses, and incentive pay. This is for a full-time work week of 40 hours. Employers must have managers or supervisors on the premise at all times, from when the business opens to when the last employee leaves the location. Lastly, employers must maintain time sheets or records of the hours worked, as well as payroll records, dating back at least three years.

If employers are found to be in violation of these regulations, they are required to pay any back wages and an equal amount of the back wages in liquidated damages. These are to be directly paid to the employees.

This case is Perez v. Arriaga Inc. (dba Señor Pancho’s), et al., Case Number: 5:13-cv-01939.

Were You Denied Wages as a Restaurant Employee?

If you believe you are owed unpaid overtime or wages, you have legal options. Learn more about your rights and obtain a free legal review of your potential case at the Restaurant and Bar (Service Industry) Wage and Hour Class Action Lawsuit Investigation.