California restaurant owner agrees to pay $824K in back wages, damages to 102 workers after Department of Labor finds employer failed to pay overtime

MANTECA, CA – A restaurant in California will pay $824,405 in back wages and liquidated damages to 102 workers after an investigation by the U.S. Department of Labor found the company’s pay practices denied employees overtime pay for the hours they worked beyond 40 per week, as the law requires.

Investigators with the department’s Wage and Hour Division found Juan Francisco Fonseca – owner of a restaurant company operating under different corporations as La Estrella Tacos & Seafood at four locations in Manteca, California – in violation of the Fair Labor Standards Act for not paying required overtime rates and failing to maintain accurate and complete payroll records.

Division investigators found the employer tried to avoid paying overtime by creating different corporations and not combining the hours worked at multiple locations for purposes of overtime pay calculations. Some employees who worked up to 26 overtime hours per week were paid at their regular rates of pay.

“Restaurants with workers at more than one location cannot simply move employees between establishments in the same workweek to avoid overtime pay,” said Wage and Hour Division District Director Cesar Avila in Sacramento, California. “This employer’s costly disregard for their workers’ rights has also resulted in the assessment of civil money penalties.”

In addition to the employer paying $412,202 in overtime back wages and an equal amount in damages, the department assessed $50,320 in civil money penalties due to the willful nature of the violations.

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the rate of pay for all hours worked over 40 in a workweek. 

Workers and employers can contact the division confidentially at its toll-free number, 1-866-4-US-WAGE (487-9243). Learn more about the Wage and Hour Division, including the agency’s restaurant compliance assistance toolkit, an overview of FLSA protections for restaurant workers and Workers Owed Wages, a search tool to use if you think you may be owed back wages collected by the division. Workers and employers alike can track hours worked and pay by downloading the department’s Android and iOS Timesheet App for free in English or Spanish.

This news release is also available in Spanish.