Court judgment orders four Phoenix-area Federico’s Mexican Food Restaurants to pay workers $202K in overtime back wages, damages

Employer: Federico’s Mexican Food Restaurant

Sites: 4014 North 43 Avenue, Phoenix, Arizona
3730 West Happy Valley Road, Suite 109, Glendale, Arizona
20429 North Lake Pleasant, Suite 101, Peoria, Arizona
7410 South 35 Avenue, Laveen, Arizona

Investigation findings: An investigation by the U.S. Department of Labor’s Wage and Hour Division found that four locations of the Federico’s Mexican Food restaurant chain failed to pay the additional half-time for each hour worked beyond 40 in a work week, as required by the Fair Labor Standards Act. The employer paid hourly employees overtime hours at straight time, in cash, and off the record. The company also failed to pay overtime for the combined hours worked at multiple locations during the same week. Some of the employees worked an average of 48 hours per week for $8 per hour with no overtime. In addition, Federico’s failed to keep accurate records of the hours and wages paid, also in violation of FLSA’s recordkeeping provisions.

Resolution: Federico’s Mexican Food admitted to willfully violating the FLSA’s overtime and recordkeeping provisions. In a consent judgment filed in the U.S. District Court for the District of Arizona on May 20, a judge ordered the restaurant chain to pay $101,175 in overtime back wages and an equal, additional amount in damages to 48 employees. The judgment requires the restaurants to improve their system to record hours worked, to provide employees with pay stubs that clearly show the number of hours worked and wages paid per period, and to distribute employee handbooks that include fact sheets from U.S. Labor Department and contact information for the Wage and Hour Division.    

Quote: “Wage violations, especially with overtime, are far too common in the restaurant industry,” said Eric Murray, district director for the Wage and Hour Division in Phoenix. “We will continue to ensure that workers get paid all the wages they rightfully earn, even if some employers use tactics such as paying cash and off-the-books to avoid what is required by law.”

The department’s regional office of the solicitor litigated the case.

Federico’s Mexican Food has 21 locations in Arizona and three in New Mexico.

Information: 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/.