US Labor Department investigation recovers nearly $355K for 25 workers owed back wages by Mexican food restaurant in Mankato, Minnesota

MANKATO, Minn. — Twenty-five employees of a Minnesota restaurant will receive almost $355,000 in back wages after U.S. Department of Labor Wage and Hour Division investigators found that the eatery violated minimum wage, overtime and record-keeping provisions in the Fair Labor Standards Act.

El Mazatlan Mexican Restaurant Inc., a Mankato-based restaurant, and its owner, Karina Felix, will pay the back wages under terms of a consent judgment entered in the U.S. District Court for the District of Minnesota. The consent judgment resolves a lawsuit filed by the department seeking the back wages.

Investigators found that most of the kitchen staff was not on the restaurant's payroll records. For employees that were on the payroll, many were instructed to punch time cards for 40 hours a week, while routinely working 60 hours or more. Tipped workers were often issued their hourly paychecks out of tips collected by management.

"Low-wage workers have a hard time making ends meet. Employers who fail to pay legally required minimum wage and overtime deprive workers of money they earned and need to support themselves and their families," said Kristin Tout, assistant district director of the Wage and Hour Division's Minneapolis office. "The restaurant industry employs some of our nation's lowest paid workers. They are often vulnerable to exploitation. As the consent judgment we secured in this case shows, we will not hesitate to pursue legal action to protect these workers."

Wage and Hour investigators found that the restaurant violated minimum wage requirements by failing to pay servers minimum wage and paying them in tips. El Mazatlan also paid straight salaries to kitchen staff, regardless of hours worked. For some workers, this salary, when divided by the hours worked, was not enough to cover the federal minimum wage of $7.25 per hour. These salaried workers, who are entitled to overtime, were not paid legally required overtime for hours worked beyond 40 in a workweek.

Under the terms of the consent judgment, the restaurant and Felix agreed to comply with the minimum wage, overtime and record-keeping provisions of the FLSA. El Mazatlan will now record daily tips, provide employees with detailed pay stubs and retain a certified public accounting firm to conduct annual audits of its pay practices. Employees also will be provided copies of wage laws in Spanish, and the employer will display posters about the FLSA in employee-accessible areas. Additionally, the restaurant will no longer employ manager Jose del Carmen Mendez Leon.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week.

Under Minnesota state law, employers are required to pay tipped employees the full applicable minimum wage, in addition to any tips received. Employers must be aware that they are required to comply with all laws that apply to their businesses, including federal, state, and local labor laws.

Employers also are required to provide employees notice of the FLSA tip credit provisions, to maintain accurate time and payroll records and to comply with the hours, hazardous orders and other restrictions applying to workers under age 18.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd.

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Civil Case Number: 0:15-cv-02727