Two southern Minnesota restaurants have been ordered in a federal court ruling to pay cooks, dishwashers and other workers more than $435,000 in back wages after a U.S. Department of Labor investigation found many workers had received only about half the pay they earned.
More than 35 workers at Rancho Loco Grill and Bar in Red Wing and Rancho Loco Mexican Grill and Bar in Cannon Falls were underpaid, according to an investigation by the U.S. Department of Labor's wage and hour division.
The owners could not be reached for comment.
Servers and other front-of-the-house workers were paid for 60 hours no matter how many hours they worked. They were frequently required to work early to prep, but they weren't allowed to punch in until the first customer arrived, the Labor Department said.
Cooks and dishwashers were also misclassified as independent contractors instead of employees and were paid a flat rate instead of hourly, so they could not qualify for overtime pay, the department said. The restaurants also didn't maintain accurate records of wages and numbers of hours worked.
"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 Kristin Tout, wage and hour division assistant district director in Minneapolis, in a statement Tuesday. "Restaurant employees are among the nation's lowest paid essential workers and they are often unaware of their rights to minimum wage and overtime."
A judgment in U.S. District ordered owners Ramon Ruelas, Jorge Arcos, Nancy Arcos and Medardo Arcos to pay the wages with interest and also agree to comply with the Fair Labor Standards Act going forward.
