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Mexican Restaurant Pays Over $74K in Back Wages for Employee Misclassification

March 6, 2012

Our Santa Ana employment lawyer Vincent Howard regularly discusses the topic of wage and hour violations in low-wage industries across the country. A frequent Costa Mesa, California employment lawyer blog topic has been in regard to the U.S. Department of Labor's (DOL) ongoing fight against wage and hour issues in the restaurant industry--where vulnerable workers are often unaware of the federal and state employment laws in place that protect their rights.

In a recent DOL investigation that Vincent Howard has been following, a Mexican restaurant in Arkansas has paid 28 current and former employees $74,413 in back wages, after the restaurant was found to have violated the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA) at four different restaurant locations, and engaged in employee misclassification.

The Little Rock District Office Wage and Hour Division (WHD) of the DOL reportedly found that Los Agaves Mexican Restaurant misclassified employees as exempt from the minimum wage and overtime requirements of the FLSA, which caused the workers to receive less than the federally required payment rate. The restaurants reportedly compensated nonexempt employees with flat salaries, regardless of how many hours they actually worked--a violation of the FLSA. Employees who are covered under the FLSA are legally entitled to receive the federal minimum wage for every hour worked in a forty hour workweek, plus overtime payment of one and one-half their regular compensation rates for any hours worked beyond forty. This overtime payment includes commission, incentive compensation and bonuses.

The tipped employees working for Los Agaves also did not receive the proper overtime payment rate, and were paid a straight fee for all hours worked. And as our Newport Beach employment lawyers blog recently reported, under the FLSA, employers are required to compensate tipped employees at least $2.13 per hour in direct wages--to make sure that the total amount of tips earned total the federal minimum wage of $7.25 per hour. If the tips and direct hourly wage do not total the federal minimum wage, than the employer must make up the compensation difference. The FLSA also requires that tipped employees who receive $2.15 per hour should be paid overtime compensation of one and one-half times the federal minimum wage of $7.25--and not $2.13. The company is also being accused of not maintaining accurate time and payroll records for all employees according to FLSA regulation.

Of the Los Agaves restaurants, the WHD investigators found that the company owed a total of $17,508 in monetary damages to seven employees in the Nashville location, $22,402 in monetary damages to employees from the Glenwood location, $14,148 to six Prescott employees, and $20,355 to seven employees in the Murfreesboro location. Los Agaves reportedly cooperated with the investigation and has agreed to comply with the FLSA regulations in the future, in order to prevent wage and hour violations and employee misclassification in the company's Mexican restaurant locations. According to the DOL, all of the back wages have been paid to the twenty-eight current and former cooks, servers, and dishwashers who experienced the employee misclassification and FLSA violations.

If you have experienced wage and hour violations in Orange County or Southern California, contact Vincent Howard and our labor and employment legal team at Howard Law, PC today.

Los Agaves Mexican Restaurant pays more than $74,000 in back wages to 28 workers at 4 Arkansas locations following US Labor Department investigation, U.S. Department of Labor Press Release, January 3, 2012

Related Web Resources:

The Department of Fair Employment and Housing (DFEH)

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

Related Blog Posts:

Restaurant Pays $83K in Back Wages for Overtime, Minimum Wage Violations of FLSA, California Employment Lawyers Blog, November 17, 2011

Tennessee Restaurants To Pay Overtime Back Wages for Willful and Repeated FLSA Violations, California Employment Lawyer Blog, November 11, 2011

DOL Forces Wok King Restaurant to Pay $531K in Wage and Hour Violations, California Employment Lawyers Blog, October 2011

DOL Continues to Track Down Federal Wage and Hour Law Violations in the Workplace, California Employment Lawyers Blog, September 8, 2011

CA Wage and Hour Lawsuit Settlement--66 Japanese Employees to Receive $145K in Overtime Back Wages, California Employment Lawyers Blog, August 22, 2011

Another DOL Investigation Brings Restaurant Employees $275K in Overtime Back Wages, California Employment Lawyers Blog, July 18, 2011

Taqueria Restaurant to Pay Workers Nearly $250K in Overtime Back Pay and Minimum Wages, California Employment Lawyers Blog, June 15, 2011

Feds Crack Down on Wage and Hour Violations in NY Restaurants, California Employment Lawyers Blog, April 15, 2011

Mexican Restaurants To Pay Over $1M in Back Wages and Overtime, California Employment Lawyers Blog, June 1, 2011

DOL Wage and Hour Division Audits for Low Wage Industry Violations, California Employment Lawyers Blog, July 20, 2010

New Study Reveals More Abuse of Low-wage Workers in Los Angeles, California Employment Lawyers Blog, January 11, 2010

Financial Discrimination for Low-wage Workers in Los Angeles, California Employment Lawyers Blog, September 8, 2009