U.S. Department of Labor Investigation Results in Federal Court Ordering South Carolina Restaurant Owners to Pay $279,269 in Back Wages and Damages

CHARLESTON, SC – After a U.S. Department of Labor Wage and Hour Division (WHD) investigation, the U.S. District Court for the District of South Carolina, Charleston Division, has ordered Señor Tequila Inc. and Señor Tequila of Summerville LLC to pay $279,269 in back wages and liquidated damages to 68 employees at three South Carolina restaurants. The employer was also assessed $52,615 in civil money penalties.

WHD investigators discovered violations of minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (FLSA). Jaime and Sandra Villalpando - whose companies do business as Señor Tequila Mexican Restaurant and Cantinas in Charleston, Summerville, and Mount Pleasant - paid an incorrect rate for overtime hours to tipped employees and failed to pay these employees for hours they worked before and after their scheduled shifts. These practices resulted in minimum wage and overtime violations.   

The employers also paid non-tipped employees in part by check with an additional amount paid in cash. The amounts paid by check reflected a payment of the federal minimum wage of $7.25 per hour for the workers’ first 40 hours each week, and time and one-half that rate for overtime hours. The employers then made additional unrecorded cash payments to each of these employees, but failed to include those amounts in their calculations when determining overtime rates. This exclusion resulted in workers being paid overtime rates lower than those required by law. WHD also found the employer failed to record all the hours employees worked and to maintain required records.

“The employers have violated the FLSA previously and are aware of the wage laws and their obligation to pay employees for all hours they have worked,” said Wage and Hour Division District Director Jamie Benefiel, in Columbia. “The U.S. Department of Labor will hold accountable those employers that continue to violate the law.”

On December 6, 2018, the U.S. Department Labor’s Office of the Solicitor filed a complaint against the three restaurants and their owners to remedy the violations. Jaime and Sandra Villalpando settled with Department and the parties filed a consent judgment and order that the court approved on December 11, 2018. In addition to being ordered to pay the back wages, damages, and to being assessed penalties, the three restaurants and Jaime and Sandra Villalpando are enjoined from committing future violations under the FLSA.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/whd.