Photo: South Carolina Mexican Restaurant Wage Crackdown
Pancho’s Inc. — doing business as Pancho’s Mexican Restaurant I, II and III – and Papa’s and Beer Mexican Restaurant have agreed to pay 85 employees a total of $485,913 in back wages.
The back wages are owed due to violations of the Fair Labor Standards Act’s overtime, minimum wage and record-keeping provisions, which were uncovered at all four restaurant locations during investigations by the U.S. Department of Labor’s Wage and Hour Division.
The investigations were conducted under a multiyear enforcement initiative focused on the restaurant industry in South Carolina, where widespread noncompliance with the FLSA has been found. Since the start of fiscal year 2009, the division’s Columbia District Office has concluded more than 300 investigations under the initiative, resulting in more than $2.5 million in back wages recovered for more than 2,500 workers.
At Pancho’s Mexican Restaurant I, II and III, investigators found that employees were not properly compensated for all work hours. By reviewing payroll records and conducting employee interviews, investigators determined that tip-earning employees such as servers were made to rely primarily on tips for pay and consequently earned wages that fell below $2.13 per hour in violation of the FLSA’s minimum wage provision. Additionally, other employees such as kitchen staff were paid flat salaries each month — without regard to hours worked — that did not satisfy minimum wage or overtime pay requirements.
The Papa’s and Beer Mexican Restaurant investigation revealed that the employer made impermissible deductions for uniforms and other expenses from the wages of tip-earning employees, causing their hourly wages to fall below the federal minimum wage. Additionally, other employees such as kitchen staff were paid flat salaries each month — without regard to hours worked — that did not satisfy minimum wage or overtime pay requirements. The employer also failed to record the hours worked by kitchen staff.
The restaurant industry employs some of the country’s lowest-paid workers who, due to a lack of knowledge of the law or unwillingness to exercise their rights, are vulnerable to disparate treatment and labor violations.