An investigation by the U.S. Department of Labor’s Wage and Hour Division and a subsequent federal court lawsuit has found that 36 workers at Rancho Loco Grill and Bar restaurants in Minnesota were denied minimum wage and overtime pay, and were misclassified as independent contractors. In a consent judgment entered in U.S. District Court in Minneapolis, the restaurant and its owners were ordered to pay a total of $435,785 in unpaid overtime and minimum wages as well as interest, and agreed to comply with the Fair Labor Standards Act in the future.
“Our investigation found this employer broke the law deliberately. Employers who misclassify employees as independent contractors cheat those workers out of wages and deny them other workplace protections,” said a spokesman for the Department of Labor.
The Department of Labor found the restaurant paid servers and other front-of-the-house workers for 60 hours biweekly, regardless of the number of hours they actually worked. The employer also frequently required servers to report early for prep work but only allowed them to “punch in” when the first customer arrived. These practices led to the employer paying for far fewer hours than employees worked, triggering minimum wage violations.
By misclassifying cooks and dishwashers as independent contractors instead of employees, and paying them a flat rate without regard to the number of hours they worked, the restaurants denied workers legally required overtime when they worked more than 40 hours in a workweek. The restaurants also failed to maintain accurate records of employee wages and the number of hours employees worked.
If you are a worker at a restaurant and believe you are owed minimum or overtime wages or a victim of wage theft, please contact Pechman Law Group at 212-583-9500 to schedule a free consultation.