US Department of Labor recovers $190K in back wages, damages after finding St. Petersburg restaurants withheld wages to cover operating costs

ST. PETERSBURG, FL – Federal investigators have found that two St. Petersburg restaurants withheld tips earned by bartenders and servers to pay for customers who skipped out on their bills, illegally charged employees for uniforms and denied some workers required minimum wage and full overtime pay.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined the commonly owned businesses – Red Mesa Inc., operating as Red Mesa Restaurant, and Veytia Ventures LLC, operating as Red Mesa Cantina – violated several provisions of the Fair Labor Standards Act.

The division recovered $190,730 in back wages and liquidated damages for 89 affected workers as a result of its investigation.

Specifically, the division found the employers did the following:

• Withheld bartenders and servers’ tips to cover the cost of customer walkouts, which ranged from $10 to $175 per day.
• Deducted the cost of uniforms from employees’ wages which led some workers to be paid less than minimum wage.
• Paid an incorrect overtime rate to tipped employees and failed to combine hours when these employees worked at both restaurants in the same workweek. By doing so, the restaurants paid overtime at rates lower than required by law for hours over 40 in a workweek and failed to pay for all overtime hours in some workweeks.
• Paid kitchen staff straight time regardless of how many hours they worked. By doing so, the employer failed to pay them the additional half-time rate required for overtime hours.
• Failed to log workers’ hours in payroll records correctly which kept some workers off payroll records.

“By law, two or more establishments that are commonly owned are considered a single enterprise. In this case, the employer assigned employees to work at two locations they owned. They should have added the hours worked at these locations together and paid overtime when the combined hours exceeded 40 hours in the same workweek,” explained Wage and Hour District Director Nicolas Ratmiroff in Tampa, Florida. “Operating restaurants with the same owners under different corporate names does not remove that liability. Employers are responsible for understanding and complying with federal laws regarding pay practices.”

Wage and Hour Division investigators recovered more than $27 million for more than 22,500 workers in the food service industry in fiscal year 2022.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free, also available in Spanish.

Read this news release En Español.